Verizon’s Pricing Strategy: A Shift in Focus
Verizon Communications (NYSE: VZ) has faced significant challenges in its customer retention strategies over the past few years, largely due to a series of aggressive price hikes. These increases, aimed at boosting revenue and profits, have inadvertently led to a rise in customer churn—a situation the company’s new CEO, Dan Schulman, is keen to address.
During a recent earnings call, Schulman acknowledged that the continual price increases had not provided adequate value for customers, resulting in a loss of market share and a churn rate that has seen a rise of 0.25 percentage points over the last three years. Each 0.01 percentage point increase in churn corresponds to a loss of approximately 90,000 net additions, translating to a total reduction of about 2.25 million subscribers.
Adapting Strategies for Long-Term Growth
The company has recognized that merely increasing prices without corresponding enhancements in service or value is not a sustainable approach. Instead of pursuing empty price increases, Verizon is now pivoting towards a strategy that emphasizes winning back customer loyalty and market share. Schulman has made it clear that future price increases must be justified by the added value they provide to customers.
As part of this renewed strategy, Verizon anticipates flat wireless revenue this year due to the previous price hikes. However, the company projects between 750,000 and 1 million net phone additions in its postpaid sector, which is significantly higher than the net additions recorded in 2025. This recovery strategy, while it may initially impact revenue growth, is seen as laying the groundwork for healthier long-term growth.
Current Market Position and Future Outlook
As of February 3, 2026, Verizon’s stock trades at approximately $45.49, with a market cap of around $188 billion. With shares priced below 10 times the average analyst estimates for 2026 earnings, many investors see this as a potential opportunity for a turnaround. The substantial guidance for postpaid net phone additions has positively influenced investor sentiment, overshadowing concerns regarding the company’s recent weak wireless revenue forecast.
Conclusion
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