Verizon's Breaking News: This Major Setback for Their Customers Was Foreseen

Verizon has taken a significant hit in the market in recent hours. Something that left investors worried and caused a drop in its shares of more than 7%.

The American telecommunications giant had anticipated that it would go through a difficult period. But recent circumstances have intensified its problems. This setback has occurred after its competitors decided to keep their off-season promotions.

However, Verizon had stopped offering these deals since the end of 2024. This decision, apparently strategic for the company, has now triggered doubts about its future.

The Impact of Rivals' Off-Season Promotions

Verizon Communications warned that the extended promotions of its rivals would lead to "soft" growth in the number of wireless subscribers. Especially in the first quarter of the year. This forecast translated into a significant drop in the company's shares, which fell more than 7%.

In its conference with analysts, Verizon's Chief Revenue Officer, Frank Boulben, pointed out that the first quarter of 2025 would be "a bit unusual." Mainly due to the strong competition from its rivals, who did not withdraw customer incentives as Verizon did at the end of last year.

Despite the promotions and discounts from its competitors, Verizon had decided not to follow the same strategy. It thought that this would be more beneficial in the long run. However, this move is now being questioned.

In the American telecommunications market, the competition to attract customers has been fierce, especially in an already saturated market. Companies like Verizon have relied on aggressive incentives and promotions to attract subscribers. This has caused steady growth but has also raised doubts about the sustainability of this model in the long term.

Not only Verizon has been affected by this extended competition. Other companies like AT&T and T-Mobile have also suffered drops in their shares. AT&T, for example, recorded a significant loss of subscribers in January, while T-Mobile saw a drop of nearly 4%.

A Slow Start in Phone Upgrades

Customers seem to be holding back on purchases. Possibly due to growing concerns about the health of the United States economy and the lack of significant innovations in devices. Despite these challenges, Verizon continues to bet on long-term growth and expects this to rebound later in 2025.

Despite this weak first quarter, Verizon has kept its target of single-digit growth in annual phone upgrades. Additionally, the company expects to add more paying wireless subscribers in 2025 than the 900,000 it added in 2024.