Verizon to add postpaid phone subscribers in Q2, Deutsche Bank predicts

Verizon is positioned to grow its base of postpaid subscribers after suffering significant losses in the first quarter, according to Matthew Niknam of Deutsche Bank Securities.

Verizon posted a net loss of 289,000 postpaid phone customers during the first three months of the year, but said the bleeding stopped after introducing unlimited-data plans in mid-February, joining T-Mobile and Sprint in the unlimited arena. The carrier had been on pace to lose nearly 400,000 customers during the period, CFO Matt Ellis reported last month.

Niknam predicted Verizon will add 125,000 net postpaid phone subscribers in the second quarter.

“We believe Verizon has made a more concerted effort to retain and grow share in this segment, with an increasing focus on unlimited,” Niknam wrote in a note to investors. “As such, we think pricing headwinds will linger into 2Q, with Verizon signaling for pressure to service revenue similar to 1Q (due to downward plan ‘optimization’). The company continues to expect second derivative improvements in the second half of the year.”

And Verizon maintains that its reversal on unlimited data won’t result in lesser revenues per user per month. The carrier’s unlimited plans are among the most expensive on the market, and it believes customers are willing to pay the price to access its network.

“The other key component around this is when we made that change (to unlimited), it wasn’t a price reduction,” Ellis said earlier this week at an investor conference. “Overall we think this will not be a negative to ARPU by going all-in on unlimited…. We’re still (charging a) premium price and we launched in a disciplined fashion a premium to where the market is because we have the premium network. So we like where we’re performing today.”