Your Verizon Stock Thesis Has One Loose End

Verizon (VZ) is fundamentally rethinking how it competes for wireless customers. Since mid-June 2026, the company has stopped charging activation or upgrade fees and removed phone subsidies from the price of its wireless plans. That shift sacrifices fee income in the division that generates most of Verizon’s revenue. Now, the company has yet to show it can keep adding wireless customers while moving away from phone subsidies.

Verizon Is Moving Away From Phone Subsidies

Verizon’s customers are already replacing their phones less often. Management has said that shift is its own doing. Upgrade volumes fell nearly 27% from a year earlier in the second quarter of 2026.

On Verizon’s second-quarter 2026 call, analysts asked about competition, including whether the wireless market would get tougher with a new device launch in the fall.

The stakes are clear in the numbers: wireless service revenue, which tracks the monthly bills customers pay, was $20.8 billion in the second quarter. That metric was down 0.7% from a year earlier, yet it accounts for about 61% of Verizon’s total revenue of $34.3 billion for the quarter.

Verizon Points To Fewer Customers Leaving

Management has said competition in wireless is moving away from subsidies, at least for Verizon, and toward the overall customer experience. It points to early figures in support of this approach. Consumer postpaid phone churn, the rate at which those customers leave, was 0.84% in the second quarter, slightly better than a year earlier. In the second quarter, Verizon’s promotional cost of acquiring consumer customers also improved by about 15% from a year earlier.

Management has also noted that its new $45 wireless plan has raised the average revenue it collects per account, with new accounts growing in the two months before the earnings call.

Still, the second-quarter figures capture only a few weeks of the new plans, which went on sale in mid-June. Looking ahead, management has given no 2027 growth figure. Executives have said they will discuss that year when the company reports fourth-quarter results.

Verizon’s October Report Covers The New Plans In Full

Verizon will report third-quarter 2026 earnings on Monday, October 26, 2026, marking the first full quarter with the new plans on sale.

Management’s guidance groups service revenue from wireless and broadband together. Executives have guided that combined revenue to approach 3% growth in the third quarter, compared to 2.8% in the second. The company also said it expected new accounts to grow in the third quarter. Hitting growth close to 3% alongside rising new accounts would offer the first full-quarter support for management’s case. The check on wireless alone is wireless service revenue, which was down 0.7% from a year earlier in the second quarter.

Does This Mean You Should Act On VZ?

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