Reliability Trumps Price: Verizon shows strong Q3 gains

by Matt Klassen on October 21, 2015

Do you want cheap wireless service or do you want reliable wireless service? This has been the ever-present question among wireless carriers, but while most opt for the former, choosing to compete on price, Verizon has always stuck to its guns, avoiding promotional campaigns and marketing ploys in favour of offering unprecedented reliability at a premium price…and guess what, people are willing to pay.

Verizon’s commitment to coverage and reliability has yet again won the day, as the company reported a net gain of 1.3 million new subscribers in Q3 of 2015, including 430,000 new phone subscribers.

As Roger Cheng of CNET explains, the numbers suggest that Verizon customers are less likely to be wooed by the lower prices and attractive promotional campaigns offered by Big Red’s competitors, choosing instead to stay with the carrier who has long been synonymous with reliable and comprehensive coverage.

For years Verizon has been the most expensive option for American mobile customers, but contrary to popular thinking, customers, in large part, remain loyal to the carrier, but not because it’s the fastest, but because it simply works when you want it to, where you want it to. Full stop.

But although Verizon is still considered the king of network coverage, its lofty throne is not quite as lofty as it used to be, as AT&T has made strong gains of late, its once deplorable network service now only a few mere steps behind Big Red. Not only that, but T-Mobile boasts the fastest data network, while it and Sprint compete tooth and nail to continue to drive market prices downwards.

Amidst all this, however, Verizon remains strong, not only because its network does actually rank as the most reliable, but because it’s really good at loudly proclaiming that fact to one and all.

Interestingly enough, the company’s “service” revenues were down 4.1% over a year ago, while its “equipment” revenues jumped from $2.5 billion last year to $4.3 billion this quarter. The reason, as we’ve mentioned several times before, is that more people are turning to instalment plans to purchase their phones.

In fact, a large part of Verizon’s success this quarter is that people continue to opt to pay in monthly instalments, which when coupled with an attractive early upgrade option (like Verizon Edge)  sees people effectively locking themselves into perpetual lease payment, a model that Verizon expects will account for 70 percent of its new phone activations by Q4 of this year.

All that to say, Verizon is clear evidence that cheap isn’t always better, as people continue to stay loyal to Big Red and pay a higher price because of what it offers, peace of mind and the knowledge that your wireless connection will be there when you need it, wherever you might be.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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