Verizon CEO Rejects Free Lines As Growth, Says Company Can Now Start To Think About Raising Prices
Dan Schulman said Verizon could have added hundreds of thousands more subscribers by giving away lines and phones.
Verizon CEO Dan Schulman said on the company's third-quarter earnings call Monday that he does not count free lines as real subscriber growth, and that the carrier is now "in a place where we can start to think about" raising prices. Verizon added 406,000 postpaid phone customers in the quarter, which Schulman said was up 820% from a year earlier.
"Churn Waiting To Happen"
Verizon, which sells wireless, home and business internet and related services, posted its strongest third quarter for postpaid phone additions in five years. Schulman said that was the point: "I don't consider free lines to even be net ads. I think they're churn waiting to happen."
He said that if Verizon had operated as it did a year ago, it "could do multiple hundreds of thousands more net ads if you give away free lines and free phones." The board, he said, "questioned whether that was a typo or not" when shown the nine-fold rise. He said every line and account came with revenue.
Postpaid net account additions were 137,000, the best quarterly result in over a decade, according to Schulman. He raised the 2026 outlook for postpaid phone net additions to 1.1 million to 1.2 million.
Room to raise prices
Asked by a UBS analyst about pricing power, Schulman said he is not against price increases if value is added. Past increases without added value, he said, "come back to haunt you" as churn climbs and customers lose trust.
Verizon has added a lot of value in the past year, he said, so "there's potentially room for us to adjust that price-to-value equation by increasing pricing as well." The company launched its Simplicity plan in June.
Cheaper to win, fewer upgrades
CFO Tony Skiadas told analysts that cost of acquisition fell 41% from a year earlier and retention cost fell 30%. Upgrade volumes dropped more than 20%, which he said contributed to lower equipment revenue. Equipment revenue fell 9%, and total revenue was $34.3 billion, up 1.5%.
Adjusted earnings per share were $1.31, up 8%. Verizon now expects full-year adjusted EPS growth of 7% to 7.5%, up from 6% to 7%, and free cash flow growth approaching 12%, up from 9% to 10%.
Schulman also said Verizon signed a dark fiber deal with Amazon Web Services valued at over $2 billion.
Schulman said Verizon will lay out its 2027 outlook, including how its AI-connected business drives growth, on the next earnings call.
Sources
- Verizon lifts annual forecasts, signs more than $2 billion AI infrastructure deal with AWS — Reuters
- Verizon raised outlook, signed $2B+ Amazon AI deal in Q3 2026 earnings — qz.com
- Verizon’s stock rises as subscriber surge impresses Wall Street - MarketWatch — MarketWatch
- Verizon Raises Earnings Outlook as Quarterly Postpaid Subscribers Surge; Announces AI Infrastructure Deal With AWS — Yahoo Finance
- Verizon Stock: Earnings Show Why It’s This Year’s Wireless Winner — Barron's
