Verizon’s offer for the “biggest 5G upgrade ever” ends today, answering the question on a lot of minds: Was that a “promotion” in the sense of the usual definition or a sign of the way business is being done in wireless for the foreseeable future?
Verizon in June announced it was offering a new 5G phone for free to new and existing customers on select plans. Similar to its rivals’ offers, the deal was billed as “the biggest Verizon 5G upgrade campaign ever.” In fact, just yesterday, T-Mobile launched a very comparable offer.
Verizon’s big 5G upgrade offer ends today, according to CEO Hans Vestberg, who addressed that during the company’s second-quarter earnings call. “We have already pulled the biggest 5G upgrade from the market,” he said, replying to an analyst’s question.
RELATED: Verizon adds 275K wireless postpaid phone subscribers in Q2
By their very nature, promotions run for a limited time. But the way operators are pitching 5G deals, it's not entirely clear if they're doing so for a limited time or if they're here to stay. Indeed, a Verizon website listed its offer as ending at the end of the day.
Wall Street analysts attributed much of Verizon’s recent subscriber gains to that promotion. For the second quarter, which ended June 30, Verizon reported 275,000 new phone subscribers, up from a loss of 178,000 in the prior quarter. Verizon ended the second quarter 2021 with 121.3 million total retail connections.
Earnings call tidbits
In other updates from the earnings call, Verizon said it's on track with its C-band buildout, and it’s not commenting on any involvement it might have had in negotiations leading up to Dish Network’s switch from T-Mobile to AT&T as its MVNO provider.
Verizon provides its network to cable companies Comcast and Charter Communications, among others, on an MVNO basis. Asked about the Dish/AT&T deal, Vestberg said the company doesn’t comment on any specific deals in the market.
Meanwhile, Vestberg said they’re on track to hit the target of 7,000 to 8,000 C-band sites deployed this year and he didn’t say anything about hiccups in the supply chain for that gear.
“We feel very good” about those targets, he said. CFO Matt Ellis said the vast majority of the radios needed for that deployment are already in Verizon warehouses. “The supply chain is robust,” Ellis said. Spectrum clearing also is on track.
In terms of millimeter wave (mmWave) coverage, the company said it would deploy over 30,000 more sites by the end of the year, and it’s running “well ahead” of schedule for the first half of 2021, Ellis said.
It expects to cover 1 million to 2 million homes with mmWave where it can offer service by the end of the year, and that’s also on track. That's in addition to the homes covered with LTE and the first tranche of C-Band.
Asked about retail lessons learned during the pandemic, Vestberg said the company is clearly seeing much more interest in digital transactions than before when it comes to customers’ shopping patterns. In addition, when Covid vaccinations started rising, traffic increased in stores and they’re seeing “much more” foot traffic. “Not really back to pre-pandemic days, but clearly, fairly close,” he said.
“We think our customers are still going to want to come into stores and see our technology and our products,” but they might be more inclined to finish the delivery and the purchase digitally, according to Vestberg.
Roaming revenue remained down in the second quarter. International travel is not back to anywhere close to pre-pandemic levels, and “I don’t expect that to be there for the balance of this year,” Ellis said. On the upside, more customers are paying their phone bills on time.
Verizon expects to close its TracFone acquisition later this year. The deal has raised the ire of consumer groups that are concerned in particular about TracFone’s Lifeline customers. Verizon has promised to continue that program.