Verizon misses quarterly revenue estimates on slow phone upgrades

(Reuters) -Verizon Communications missed quarterly revenue estimates on Monday due to slow phone upgrades in the United States, taking the shine off strong growth in wireless subscribers and sending shares of the telecom firm down 3.4% before the bell.

Price-conscious customers are holding on to their old phones for longer durations than they did previously, which has hurt upgrade rates for telecom companies that offer promotional plans with new mobile phone lines.

Verizon reported second-quarter revenue of $32.8 billion, compared with analysts' average estimate of $33.06 billion, according to LSEG data.

Analysts have said Verizon is reeling from a historically low number of people upgrading their phones, although that could change when Apple releases its latest iPhones with artificial intelligence (AI) features, later this year.

Generative AI smartphones will be the next driver of growth for the smartphone market in the second half of the year after 5G and foldables, research firm IDC said last week.

Verizon said it added 148,000 net monthly bill-paying wireless phone subscribers from April to June, above analysts' average estimate of 127,870 additions, according to Visible Alpha. It had lost 68,000 subscribers in the prior quarter.

The company's myPlan, which was launched in May last year and allows customers to pay for only what they need, has helped it compete better with AT&T and T-Mobile US in the tightly controlled U.S. telecom market.

Verizon also partnered with streaming services to offer promotional bundles from platforms such as Netflix, Warner Bros Discovery's Max and Disney's services.

It even raised the price of some older plans in March to prompt customers to switch to the new plans.

The company's consumer business reported net losses of 8,000 wireless retail postpaid phone subscribers in the latest quarter, compared with 136,000 losses a year earlier.

Excluding items, Verizon earned $1.15 per share, in line with expectations.

(Reporting by Harshita Mary Varghese; Editing by Savio D'Souza and Shinjini Ganguli)