Verizon Communications Inc. (NYSE:VZ) significantly increased its mobile carrier subscribers in the fourth quarter thanks to its offer of free Disney+. The company indicated that it gained 790,000 net post-paid subscribers in Q4, exceeding the 750,000 that analysts had forecast.
Verizon adds 790,000 post-paid subscribers in Q4
Although the company reported a healthy increase in subscribers, this might have had a toll on its profits. Its adjusted earnings per share remained the same from a year ago at $1.13 per share missing on Wall Street estimates.
Post-paid subscribers are an important segment for the company because these customers usually pay up monthly in long-term contracts and are unlikely to shift providers. The offering of free Disney+ is a good strategy for the company as it contends with competition from mobile carriers AT&T Inc. (NYSE:T) and T-Mobile Inc. (NYSE:TMUS), who added 229,000 and 1 million post-paid subscribers respectively. The company also faces competition from Comcast Corporation (NASDAQ:CMCSA), Altice Inc. NYSE:ATUS as well as Spectrum owner Charter Communications Inc. (NASDAQ:CHTR).
The carrier is trying to differentiate itself, and it also has agreements with YouTube TV and Apple Music as part of the different phone and internet packages. Verizon is betting on the deals with Disney (NYSE:DIS), Apple Inc. (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) to attract more subscribers as the company continues to spend on the rollout of the 5G network.
Verizon’s media business has been struggling
The company’s media business that includes AOL, TechCrunch, HuffPost, and Yahoo web properties have been struggling, and the company took a $200 million charge to write down the value of the business. The company reported a revenue of $2.1 billion for this segment, and although it was flat, it was an improvement compared to declines the company posted last year.
In 2018 the company had taken a $4.5 billion charge in connection to the media business. As a result, since then, Verizon has been focusing on yahoo branded news and e-commerce as well as entertainment and sports services.