Verizon gets its mojo back with unlimited data

Verizon customers are pumped about unlimited data.

On Thursday, the nation's largest wireless company reported it has recovered from its first-ever net loss of wireless customers and is adding customers once again, thanks in large part to bringing back its unlimited data plan.

The company reported a net increase of 614,000 retail postpaid wireless connections for the second quarter, which included 358,000 phone additions. This is good news for Verizon, which last quarter lost almost 300,000 wireless customers. Verizon brought back its unlimited plan in February, so this was the first full quarter the company has offered it. And it's clear that customers like it.

"Verizon reignited its growth engine in the quarter, both adding and retaining wireless customers while scaling our media business and continuing to invest in our superior networks," CEO Lowell McAdam said in a statement.

Churn, or the rate that customers leave the company for another service, was flat at around 0.94 for customers who pay their bills monthly. 

The numbers underscore the importance for big companies, like Verizon, of matching competitors' offers, as rivals like T-Mobile continue to rack up more customers.

But Verizon CFO Matthew Ellis said on Thursday's investor call that Verizon hasn't been forced to slash prices to win new customers or to keep its existing ones. Verizon's unlimited data plan is priced at $80 a month, more than what its competitors charge, which Ellis said proves that customers are willing to pay more for Verizon's strong network so long as they can still get unlimited data. 

"Even with the price premium we have, customers value the high-quality network experience that we deliver," he said.

Still, there's no question the heightened competition has made this a boom time for consumers to find a good deal in mobile, such as Sprint offering a year of service for free (excluding taxes and fees), and its prepaid arm Virgin Mobile going with an all-iPhone lineup with a rate of $1 for the first year of service. AT&T is throwing its DirecTV Now streaming service into its unlimited plan for $10 extra.

A report this week from network testing firm RootMetrics also showed that the return to unlimited data isn't hurting network performance. Verizon and its competitors all saw increases in performance during the first half of 2017. And despite claims from competitors like T-Mobile, Verizon managed to keep its top spot as the best-performing carrier nationwide, according to RootMetrics.

Thursday's subscriber news comes as Verizon's competitors also continue to add wireless customers. AT&T said Tuesday that it added 127,000 postpaid wireless customers -- that is, those who pay a bill at the end of the month. But the company said it also added fewer prepaid customers.

AT&T noted during its earnings call that bundling DirecTV Now and HBO with its unlimited wireless plan has helped it hold onto customers. The company has been able to reduce its churn rate to a record low of 0.79 percent for its postpaid phone subscribers.

Still, T-Mobile is the belle of the ball in the wireless market. The nation's third-largest wireless carrier said last week when it reported second-quarter earnings that it added 1.3 million net new customers, helped largely by the 786,000 new phone customers on a postpaid plan.

Sprint will report earnings next week.

Verizon reported adjusted earnings of 96 cents a share on revenue of $30.5 billion for the quarter. The company's shares were up more than 6 percent to $47.20 in early trading Thursday.

Originally published July 27 at 5:41 a.m. PT.
Updated at 7:03 a.m. PT: Added information from the Verizon earnings call. 

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