Apr 23, 2024 | Updated: 11:35 AM EDT
Apr 24, 2017 04:46 AM EDT
Verizon Communications Inc. is suffering from customer losses but has been able to find a solution. That involved slashing prices and bringing back unlimited data packages to reel in back the users. But while that should tempt customers to return, it also has repercussions in the financials.
Verizon Communication reported a first-ever quarterly loss in the first quarter of the year, something attributed to the aggressive strategy by rival mobile carriers T-Mobile and Sprint, BGR reported. Apparently, both were becoming the market preference and employed strategies that had been well planned before implementation.
The same may have been done by Verizon Communication though a bit bluntly. They needed to find a way to stop the bleeding in the form of customer subscription losses and offering unlimited data seemed the logical course.
To offset the bleeding, Verizon Communications will need to explore other business opportunities to offset the losses. Reeling in customers via the unlimited data route is plausible but obviously not enough. Acquisitions could work but management needs to carefully study the pros and cons.
To date, Verizon Communications has explored several transactions include the one involving Charter Communications Inc., Fox Business reported. Though far apart, it is one of many deals that the company could work with. Other than that, Verizon needs to do more to improve its stance. Their stock fell another 1-percent as of Thursday, adding to the 8.3-percent decrease that analysts were expecting.
The unlimited plans offered by Verizon Communications did positively change the customer base additions but the losses remain. Postpaid customer numbers declined as expected (307,000 down), something that could change in the coming months.
With new and returning customers, the best Verizon Communications can do right now is explore other add-ons to drag in revenue. If not, exploring other business arms may be needed to ensure that the company puts an end to the losses and move up from the “red.”
