There’s a price war going on in the wireless market and consumers are the winners.
In the first six weeks of 2017, Verizon Wireless lost 398,000 on-contract wireless customers. Considering that analysts expected Verizon to add nearly 250,000 customers in the first quarter, that’s dire.It’s only thanks to Verizon’s launch of unlimited plans that the bloodshed isn’t worse. In the weeks after Verizon launched an unlimited plan, it stopped losing customers and actually gained 109,000 subscribers, bringing the net loss of customers in the first quarter to 289,000.
The obvious thing to blame for Verizon’s plummeting numbers is the recent wave of competition being driven by T-Mobile. The cheap unlimited T-Mobile One plan that it rolled out last year has seen T-Mobile poach customers from the other three big mobile carriers. Growth of postpaid customers (those who get billed every month, the bread-and-butter of the mobile industry) has stagnated at every carrier apart from T-Mobile in recent months.
The most telling number in Verizon’s earnings report is the level of “churn,” which measures turnover in customers. A higher level of churn indicates more customers hopping between different carriers, which is normally indicative of a highly competitive environment. Verizon’s churn increased from 1.03 to 1.15 percent of all customers in the first quarter, a strong sign that the race-to-the-bottom between the carriers is starting to see results.
Thanks to Wisconsin’s Unfair Sales Law, consumers can’t benefit from such price wars for most consumables.