Cellphone service providers have seen expectations shift over the past few years. Phones used to be subsidized on two-year contracts, but most major American carriers have moved toward monthly payment plans as phone costs rise: The latest flagship phone from Apple, the iPhone X, is nearly $1,000.
Seventy-eight percent of Verizon’s postpaid phone base has now transitioned to unsubsidized plans, the company said Thursday. But later product releases from Apple and Google might move more upgrades into the fourth quarter, executives said on the conference call.
“If you’re paying $1,000 on a handset, you’re going to want it to be on the best network,” chief financial officer Matthew Ellis said.
Consumers have also come to expect more data, with streaming services like YouTube and Apple Music setting new records for viewership and listeners. That’s created new challenges for carriers that have made money from data overage fees in the past.
Verizon launched Verizon Unlimited in mid-February, countering similar plans from T-Mobile and Sprint. The company said Thursday the unlimited plans have increased network usage of LTE, which now takes up over 50 percent of its available low- and mid-band spectrum.
There have also been ongoing reports of a potential tie-up between T-Mobile and Sprint, a proposition that would create a massive competitor for Verizon, although a deal between T-Mobile and Sprint has yet to materialize. The rumors come amid a wave of consolidation in both the telecom and media spaces.
Ellis said he’s confident that Verizon has the right set of assets, regardless of what others do.