Amid a price-cutting war in the American wireless industry, the Verizon juggernaut keeps growing, even though its prices are generally higher.
Verizon Communications on Tuesday said it had added about 1.5 million new wireless customers. Most of those new customers were tablet owners signing up for Verizon’s data plans.
The company reported third-quarter earnings of 89 cents a share on revenue of $31.6 billion, just barely missing analyst expectations of 90 cents a share on revenue of $31.6 billion. Over all, Verizon reported profit of $3.7 billion, a sharp increase from the $2.2 billion in profit it reported in the quarter last year.
In other words, while other carriers like Sprint and T-Mobile have been aggressively cutting prices to steal each other’s customers, Verizon, the No. 1 wireless phone carrier, has mostly stuck to its strategy of offering a superior wireless service for slightly higher prices. And Verizon has not only been unfazed by the price cuts. it continues to grow at a healthy rate.
“For at least the last four quarters, the question has been whether Verizon will eventually be dragged into the muck and mire of the rest of the industry,” said Craig Moffett, a telecom analyst for MoffettNathanson Research. “Each time, through both their comments and their results, they have made clear that they can happily and successfully float above the fray.”
Meanwhile, the smaller carriers Sprint and T-Mobile continue to struggle. Sprint, which lagged behind competitors on rolling out a faster fourth-generation wireless network, has bled many customers over the last year to rivals with better networks. T-Mobile has been adding huge numbers of subscribers, but it generally is not making much money because it relies so much on handing out freebies and big discounts, like unlimited music streaming or inexpensive international roaming, to attract new customers.
AT&T, the second-biggest carrier, also continues to grow, but has responded to some of its competitor’s price cuts with similar discounts.
Verizon has made some price cuts, but much more conservatively. For example, in February, it began offering new plans called More Everything, which offered discounts to people who signed up for large amounts of data. Still, those plans are slightly more expensive than its competitors’ similar offerings.