Verizon scrapped its revenue guidance for 2020, as it shed mobile subscribers and reported double-digit slides in profit and equipment sales in Q1 caused by the Covid-19 (coronavirus) pandemic.
Net income dropped 16.9 per cent year-on-year to $4.3 billion, while overall revenue dipped 1.6 per cent to $31.6 billion. On an earnings call, executives attributed the decline primarily to a 16.3 per cent drop in wireless equipment revenue to $4.1 billion after the pandemic caused the closure of nearly 70 per cent of its retail locations.
Wireless service revenue grew 1.9 per cent to $16.4 billion on increased adoption of unlimited plans and connections per account. However, Verizon CFO Matt Ellis warned growth for this metric would likely be hampered in Q2, due to an expected drop in roaming and other usage-based sales.
The operator lost 134,000 mobile subscribers in the quarter, including 50,000 post-paid and 84,000 prepaid.
Though it pulled revenue estimates for the year, Verizon maintained its 2020 capex forecast of between $17.5 billion and $18.5 billion. Ellis noted most spending would happen in the first half as the operator reinforces its network to meet increased demand, highlighting a $1 billion jump in Q1 capex to $5.3 billion.
CEO Hans Vestberg said it remains on track to meet annual 5G deployment targets, noting it was ahead of schedule at the end-March. He added it found creative ways to move forward despite the pandemic, for example securing new site approvals through digital channels.
When asked whether Verizon would re-evaluate its network plan and spectrum choices to account for shifting usage patterns, Vestberg insisted the operator would stick to its focus on mmWave 5G deployments in city centres.
“At the moment we still see a lot of usage in dense urban areas, it’s just that we see less movement of people because they’re staying home.”Subscribe to our daily newsletter Back