Verizon revealed its earnings for the second quarter on Thursday, July 27 and it shattered the predictions made by analysts previously. The carrier saw immense growth in the second quarter of the year, and most of this was credited to the company’s new Unlimited Data plan, which it seems managed to attract subscribers to the network. These results led to a jump in share prices in pre-market trading to $46.01, which is an increase of 3.6 percent.
Verizon reports Q2 growth due to unlimited data plans
From April to June, the No.1 U.S. mobile carrier managed to add 385,000 new postpaid customers to its network.
Last year, the company had added just 86,000 new subscribers in the same period, showing a marked growth. Total subscribers added to the network in the three months were reported to be 614,000, which is slightly less compared to last year’s 615,000 additions in Q2.
However, the company’s report indicates that its growth was nowhere near to what analysts expected. JP Morgan had estimated that Verizon would be able to add just 115,000 new subscribers to the network, while the Wall Street analysts believed that Verizon would not experience a gain of more than 70,000 subscribers in Q2 2017. Not only did Verizon defy expectations, but it also did not so by quite a margin.
Wall Street analysts also failed to predict the churn rate that the carrier would experience in the three month period.
It had predicted the rate would be around 1.1 percent, while in reality, the churn rate was closer to 0.94 percent at that time. Wireless revenue however slipped by 1.9 percent to $21.3 billion in this quarter.
According to Verizon’s report, the company now boasts 114.5 million wireless subscribers to its network. This is a marked increase from last year’s figure of 113.2 million and is also a considerable growth when compared to 113.9 million subscribers recorded in the last quarter.
Much of this growth is being credited to the carrier’s decision of reviving the unlimited data plan.
Unlimited data in Verizon
Verizon brought back the unlimited data plan to its network after an absence of almost five years. This move was enforced to keep up its competitive nature against rivals T-Mobile and Sprint, who each announced similar plans earlier.
However, Verizon did not offer the unlimited data connection at lower rates compared to the competition but instead priced it high. One line of its unlimited connection costs $80 monthly, while two lines cost $140. However, even after these high prices, customers flocked to the carrier’s network to take advantage of the unlimited connection.
