Verizon has reported strong postpaid subscriber net additions throughout the third quarter and will post solid quarterly results next week, according to Canaccord Genuity analyst Greg Miller.
Miller raised estimates for Verizon’s postpaid net adds from 1.18 million to 1.33 million. Postpaid churn, prepaid net adds, and postpaid ARPA all hold steady in the updated estimates.
With net subscriber numbers up 40 percent year-over-year as of early September, Miller is slightly raising total wireless service revenue estimates for the quarter but lowering EBITDA and EPS estimates on a lower than expected EDGE take rate.
The note points out that Verizon estimated a similar EDGE take rate for the first quarter of this year, which indicates a sequential decline instead of the slight acceleration that Canaccord Genuity anticipated.
Verizon this week initiated some changes to its EDGE program, the EIP it put in place in response to similar offers from other carriers. Verizon is now spreading the device payments over 24 months instead of 20 months. The carrier also now requires customers pay off 75 percent of a device before upgrading, which moves the early upgrade cycle to 18 months from one year previously. Verizon also raised the service fee discount from $10 to $15 for data plans of 500MB to 8GB. Higher plans still earn a $25 monthly service fee discount.
In spite of its apparently reactionary changes to EDGE, Verizon remains the best-positioned of the national carriers, according to Miller, who attributes the carrier’s strength to its network quality and large postpaid share.
Verizon will announced its third quarter earnings on Oct. 21.