Verizon Grows Subscribers While Spending Less on Promotions
Oct 26, 2026The wireless carrier gained customers, reduced promotional costs and saw fewer cancellations. But the results came with some tradeoffs.
Verizon added 406,000 net monthly billed phone lines in the third quarter, compared with just 44,000 a year earlier. Meanwhile, costs associated with promotions to attract new customers fell 41%, and costs for promotions to retain existing customers declined 30%.
Fewer customers were canceling their service, too. It's an interesting combination for subscription businesses that regularly use discounts and special offers to bring customers in or persuade them to stay.
What's Behind Verizon's Subscriber Growth?
Verizon reported its strongest third-quarter phone line growth in five years. It also gained 137,000 net customer accounts, its best quarterly performance in more than a decade.
There's a difference between those numbers. A family might have four phone lines under one account, for example. The 406,000 figure reflects the net increase in phone lines after accounting for cancellations, while the smaller number measures the increase in customer accounts.
During the October 26 earnings call, CEO Dan Schulman said Verizon wasn't relying on free phone lines to boost its subscriber numbers. Every new line, he said, was generating revenue.
Verizon's monthly cancellation rate also improved slightly, from 0.98% a year earlier to 0.94%. The company has been changing how it competes for customers, with its newer Simplicity plan emphasizing predictable monthly pricing and more selective promotional offers to attract subscribers and keep existing ones.
Management credits these changes, along with fewer subsidized phone upgrades, for reducing promotional costs. The company hasn't established how much each change contributed to its improved customer results.
The Tradeoffs
Verizon's approach is also affecting another part of its business.
Customers upgraded their phones more than 20% less frequently than a year earlier, and revenue from phone and equipment sales fell 9%. Average monthly service revenue per customer account also declined, from $171.27 to $168.08.
That revenue figure reflects entire accounts, some with multiple phone lines, rather than what an individual customer pays for service. Changes in the mix of customers and lines can affect the average.
Even with those declines, Verizon's wireless and broadband service revenue increased 2.9%. The company also reported stronger earnings, helped by lower promotional costs and other cost reductions. Whether customers acquired under the newer plans will stay longer or generate more value over time remains an open question.
INSIDER TAKE
Verizon's results challenge a familiar assumption about subscriber growth: that attracting more customers or keeping existing ones requires spending more on promotional offers.
The company is reporting stronger growth and slightly better retention while spending considerably less on incentives. That's encouraging, particularly given how difficult it can be to pull back on offers that customers have come to expect.
But there's more to learn before calling the approach a success. Verizon hasn't disclosed the full cost of acquiring customers under its newer plans or how quickly that spending pays back. Revenue per account is also lower, and we don't yet know whether the new customers will stay longer.
For subscription operators, Verizon's experience raises an interesting question about promotional spending. How much is actually needed to win and keep customers, and how much continues because it's become an established part of the business?
Verizon's latest quarter suggests there may be room to reconsider that spending. Whether the results hold up over time will tell us more.
Related Member Resources
Verizon's subscriber growth and lower promotional costs look promising, but the numbers leave two questions unanswered: Are those customers worth what the company spends to acquire them, and will they stay? These tools help operators examine both questions in their own businesses.
- Subscriber Acquisition Model: Forecast Costs, Growth, and Payback
This financial model lets teams test acquisition spending, subscriber growth, retention and payback under different assumptions. It's useful for examining whether reducing promotional incentives could improve returns, and how much subscriber growth the business can afford to give up.
- Subscription Growth Quality Framework: Beyond Subscriber Adds (Includes Scorecard)
This framework and scorecard help teams examine subscriber growth alongside retention, engagement and revenue quality. Verizon's results show why those measures belong together. A rising subscriber count is encouraging, but operators still need to understand whether the growth is creating lasting business value.
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