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The largest wireless carrier in the US, Verizon Communications Inc. discovered that the number of customers who will sign 2 year contracts for the services of cell phone are depleting each day. Verizon revealed that it gained around 423,000 under contract wireless customers in the first quarter of the year. This was the lowest number that Verizon came across in nearly the last 10 years.
AT&T Inc. reported 512,000 customers under new contract for the first quarter which is a relatively low number. Verizon earned $409 million or 14 cents per share in the quarter as compared to $1.645 billion or 58 cents per share, a year earlier. The drop in the customers came from the health care reform package and a one-time charge for a change in tax benefits. However, the revenue rose 1.2% to $26.9 billion.
Verizon is looking forward to sign up more people for smart phones, which will help to keep their wireless revenue growing. This will require people to pay extra money every month for data services.
Prepaid service is yet another revenue area, which is usually cheaper than contract plans and is available to customers without credit. In this quarter, Verizon added 1.3 million through resellers but it also lost 139,000 prepaid customers. In totality in this quarter, Verizon added 1.55 million wireless customers. This was some positive news for the wireless carrier as last year in the same quarter they added 1.3 million customers. These numbers are still not worth Verizon.
Thus, Verizon ended the quarter with 92.8 million subscribers, whereas AT&T reported 87 million customers. At the end of last year, Sprint had 48.1 million customers and it is expected that they would update the number soon.
