Verizon Posts Surge in Wireless Customers But Warns of Margin Squeeze

Verizon said it is experiencing a surge in wireless customer additions during the current quarter but warned that margins could be squeezed as consumers opt for subsidized plans.

Chairman and Chief Executive Lowell McAdam said retail net additions of lucrative postpaid customers have grown 40% so far during the third quarter from last year's period when the company posted 927,000 additions. However, Verizon said its Edge plan, which offers smartphones and devices at their full prices in payment installments, posted flat results and accounted for 12% of total phone activations. As a result, the company said it expects the combined trend of high customer growth and low Edge adoption rates to pressure the wireless segment's service margin on a sequential basis. During the second quarter, the segment posted a margin of 50.3%.