A Verizon store in Boston, Mass., on Sept. 1, 2023.Michael Dwyer/The Associated Press
Verizon VZ-N projected 2025 capital spending above market estimates on Tuesday as the U.S. telecom giant builds out its high-speed internet business to offset rising saturation in the wireless market, sending its shares down more than 4 per cent.
The company also missed third-quarter revenue estimates as high interest rates forced customers to lower spending on phone upgrades, pulling down its wireless equipment sales by 9 per cent and offsetting higher-than-expected wireless subscriber additions.
Slowing growth in the U.S. wireless market has prompted Verizon and its rivals including AT&T to sharpen focus on high-speed internet services, an area that has long been dominated by broadband companies such as Comcast.
Verizon said it plans to double subscribers for its fixed wireless service to between 8 million and 9 million by 2028.
The service added 363,000 customers in the September quarter to hit a goal of 4 million to 5 million users 15 months ahead of schedule.
Verizon has also been investing heavily in C-band spectrum, which allows for widespread 5G coverage with better speeds. It expects to add 80 per cent to 90 per cent of its sites on C-band by 2025-end.
It forecast capital spending for 2025 between $17.5-billion and $18.5-billion, the midpoint of which was above estimates of $17.57-billion, according to data compiled by LSEG.
The figure was higher than its 2024 expenditure forecast.
To aid its high-speed internet push, Verizon agreed to buy Frontier Communications last month in a $20-billion deal. But some of Frontier’s largest shareholders are concerned the offer was too low, Reuters reported earlier this month.
Verizon gave its “best and final” deal and was confident it was “good for all stakeholders,” CEO Hans Vestberg said on Tuesday.
The company added 239,000 net monthly bill-paying wireless phone subscribers in the September quarter, compared with expectations of 218,100 additions, according to FactSet.
Growing adoption of the company’s myPlan, a customizable offering with streaming perks including Disney+, Hulu and Max for an extra cost, has helped Verizon.
Its total revenue of $33.3-billion came in slightly below expectations of $33.43-billion. Adjusted profit per share of $1.19 was one cent above estimates.