- Verizon CEO Hans Vestberg said the carrier won’t be absorbing high tariff costs on handsets
- The company reported 356,000 wireless postpaid phone net losses in Q1
- The prepaid segment continues its turnaround, adding 137,000 net customers in the first quarter
Verizon Chairman and CEO Hans Vestberg answered one big question that’s been top of mind since the tariff tremors started: Will operators eat the higher expected costs of handsets?
His answer: No. While tariffs are a constantly moving target and it’s hard to say what’s going to happen next, he doesn’t plan on absorbing higher phone costs.
“If the tariff is going to be as high as they say on the handset, we're not planning to cover that in our work. That's just not going to be possible,” he said on today’s Q1 2025 earnings call. “We will not cover any enormous increase on tariffs on handsets. That’s ultimately going to hit the consumer in the market.”
When it comes to consumer behavior, Verizon hasn’t seen any major shifts that could be directly tied to tariffs, he said. There was some speculation that consumers might buy new handsets in anticipation of tariffs, but any uptick there so far likely was due to Verizon’s new 3-year price guarantee that it introduced in early April.
As for capital expenditures, “a very small portion” of the $18 billion that Verizon expects to spend in 2025 is exposed to higher equipment prices associated with tariffs, he said. On top of that, “we are working with all our suppliers,” similar to what they did during Covid, to minimize the impact.
Big losses in postpaid
While extremely complicated in the broader picture, the tariff questions were almost easier to answer than how Verizon is going to get itself out of the doldrums when it comes to postpaid consumer phones, where it lost a whopping 356,000 subscribers in Q1 2025. That compares to 194,000 postpaid phone net losses in Q1 2024.
That said, the first quarter tends to be its weakest and Verizon expects to see improvements as the year unfolds. The last two weeks of March were “very good and strong for us,” and coming into April, Verizon is seeing double digit growth in gross adds after launching that 3-year price guarantee, said Sowmyanarayan Sampath, head of the Consumer Group at Verizon.
Where Verizon is seeing relatively big improvements is in the prepaid sector, where Verizon didn’t really participate until it bought TracFone in 2021. It steadily lost prepaid customers until the second half of last year, when a new prepaid transition team got to work.
Verizon’s consumer group reported 137,000 prepaid net additions in Q1 2025 compared to 131,000 prepaid net losses in the first quarter of 2024.
In the fixed wireless access (FWA) segment, Verizon saw net additions of 308,000 in Q1, growing the base to more than 4.8 million FWA subs. The company still expects to serve 8 million to 9 million FWA customers by 2028.
Consumer wireless average revenue per account (ARPA) was $146.46 in Q1 2025, an increase of 3.6% year over year. In total, wireless service revenue in Q1 2025 was $20.8 billion, up 2.7% year over year.
Bits and bytes
Here are a few other highlights from the Q1 earnings call.
- Verizon isn’t seeing an impact from a crackdown on immigration. Lower immigration could affect the lower end of the prepaid market, but that’s not a segment where Verizon typically has played a big role; it’s more focused on the high end of the prepaid market.
- The C-band expansion continues and Verizon is now starting to deploy C-band in more suburban markets, with the expectation to have C-band in 80% to 90% of macro sites by the end of this year.
- In fiber, the focus is on closing the Frontier acquisition. It’s working through regulatory approvals and that’s going as planned. The expectation is to close that deal in the first quarter of 2026.