Verizon Rides on Solid Subscriber Growth: Will it Boost Revenue?

Verizon Communications Inc. VZ is benefiting from healthy traction in the wireless vertical backed by competitive price offers and diligent execution. In the fourth quarter, the company reported wireless retail postpaid phone gross adds of 3.5 million, up 13% year over year. Consumer postpaid phone gross adds were 2.7 million, up 15.3% year over year. It also reported 5.6 million postpaid upgrades, up 8.7% year over year. Its wireless retail postpaid ARPA was $147.36 at the end of the fourth quarter, up 1.2% year over year.

The company has been focusing on customer experience improvements and better value propositions to improve churn over time. Moreover, its strategy of bundling wireless services with broadband products is also improving churn. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. This higher switching friction lowers churn rate and boosts customer retention.

Fixed wireless access broadband remains a major growth engine. In the fourth quarter, fixed wireless net adds were 319,000. The prepaid wireless business is also showing positive momentum. In the fourth quarter, the company reported 109,000 prepaid net adds, its sixth consecutive quarter of user growth.

Verizon expects strong growth in wireless subscribers in 2026. The company expects 750,000 to 1 million postpaid phone net adds in 2026, indicating 2-3x growth compared to 2025. However, wireless service revenue growth is expected to remain flat.

Strong network investments are supporting wireless growth. The company reports that c-band deployment is 90% complete, and investment in 5G and RAN is ongoing. Moreover, the strategy of AI integration in wireless operations to predict potential issues and optimize the overall operations is positive.

How Are Competitors Faring?

Verizon faces competition from T-Mobile, US, Inc. TMUS and AT&T, Inc. T in the wireless industry.

During the quarter, T-Mobile added 2.4 million postpaid net customers and 261,000 postpaid net accounts. Postpaid phone net customer additions were 962,000. The postpaid phone churn rate was 1.02%. 5G broadband net customer additions were 495,000. Postpaid average revenues per account rose to $150.17 from $146.28 in the year-ago quarter. T-Mobile boasts a strong position in the 5G market. The company’s 5G network covers 98% or 330 million people in the country. T-Mobile continues to deploy 5G with the mid-band 2.5 GHz spectrum from Sprint.

AT&T witnessed solid subscriber momentum with 641,000 post-paid net additions. This included 421,000 postpaid wireless phone additions. Postpaid churn was 1.12%, while postpaid phone-only average revenue per user (ARPU) decreased marginally year over year to $56.57 due to lower international roaming. AT&T is also aggressively expanding its 5G network, currently covering more than 316 million people nationwide. Its 5G service entails the utilization of millimeter wave spectrum for deployment in dense pockets, while in suburban and rural areas, the company intends to deploy 5G on mid and low-band spectrum holdings.

VZ’s Price Performance, Valuation and Estimates

Verizon has gained 15.8% in the past year against the Wireless National industry’s decline of 4.4%.

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Going by the price/earnings ratio, the company’s shares currently trade at 10.17, down from 13.01 for the industry.

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VZ’s earnings estimates for 2025 and 2026 have increased over the past 60 days.

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Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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