Verizon Says Earnings In 2016 May Be Flat
Verizon said its earnings may plateau in 2016 as the US’s biggest wireless carrier by subscribers digests the changes it has made to its business amid bruising competition this past year. Verizon and its rivals have been battling over a limited number of new customers in a market that has matured. Amid the competition, Verizon has largely stayed above the fray. It added 1.7 million mainstream connections in the first six months of 2015. But the fight is finally catching up with Verizon.
Carriers have restructured their service plans in recent years to move away from two-year contracts and to separate the price of service from the price of the handset. Verizon has made that transition more slowly than its rivals, meaning it is now going through the pain of switching customers to lower-priced plans -- a shift that hurt its rivals in 2014. “The whole industry has been going through a process of repricing the base,” said Jonathan Chaplin, a telecommunication analyst at New Street Research. T-Mobile, Sprint and AT&T are much further along, however. “Verizon is behind the rest of the industry in the repricing process. They have the most pain still ahead of them.”