Verizon Communications, Inc. (NYSE:VZ) added more wireless phone subscribers in the fourth quarter of 2018 as they continue to expand their base.
On the other hand, smartphone manufactures Samsung Electronics Co. (NASDAQ:SSNLF) and Apple Inc. (NASDAQ:AAPL) struggled over the same period and they have already issued profit warnings to their investors that they are unlikely to meet their expectations.
Increase in subscribers
The company has indicated that its subscribers grew and they added 650, 000 net subscribers as a result of new post-paid mobile phone connections in the fourth quarter. The new phone connections show an increase from a net 295,000 added in the previous quarter contrary to the expectations of analysts.
Speaking at a Citigroup analyst conference, the president of Verizon communications, roman Dunne indicated that they benefitted from the addition of new lines per account by their customers. Similarly, the company’s ‘mix and match’ family plans attracted more customers due to its flexibility to allow subscribers to choose and pick only the amount of data they require.
He also added that Verizon Communications equally benefited from a “stretch in participation” that allowed them to attract younger and old subscribers.
According to Citi analysts they expected Verizon to add its net subscribers by 400,000 new phone subscribers in the fourth quarter of 2018 a feat they exceeded. Verizon is the largest carrier in the United States, and the additions highlight the company’s diverging fortunes compared to smartphone manufacturers such as Apple and Samsung.
Post-paid customers are precious in the long term strategy of the business since they will pay their bills monthly under a long-term contract thus ensuring the company has a steady source of revenue.
However, smartphone manufacturers such as Samsung and Apple are dealing with consumers holding onto their phones for longer as well as market fallout of recent wireless contracts that slowed their usual device and service upgrading cycle that normally takes two years.
Verizon’s stock indicated a 3% increase on Tuesday in the latest market trading at $58.38 with a daily range posting a low of $57.05 and a high of $58.69.