Verizon’s customer growth down, Sprint PCS responds

(Telephony) Verizon Wireless announced that it has added more than 518,000 new customers during the first quarter, below analysts’ expectations of between 575,000 and 750,000. Meanwhile, to prove that it too had not fallen short of expectations, Sprint PCS has said it will beat its first-quarter subscriber growth numbers, adding more than 800,000 new customers.

“For Sprint, their announcement was done to show that they are gaining market share in terms of where Verizon is and that they are not as affected by the market as other carriers have been,” said Jason Bell, an analyst with Robinson-Humphrey, which today upgraded Sprint PCS to a buy rating.

Verizon may dominate in terms of market share, but Bell believes Sprint PCS is first in terms of growth.

Verizon Wireless’ announcement looked to be more bad news for the wireless industry, which remains affected by the slowdown of consumer buying or upgrading to new handsets. However, informing the financial industry sooner rather than later could help companies in the long run, said David Chamberlain, senior analyst at probe research.

“I can see this reverberating in the financial community,” Chamberlain said. “But clearly this is a market [telecom] companies don’t want to surprise. Any surprises are taken as terrible news. Announcing things in advance is an important strategy.”

Verizon Wireless, which now has 28 million customers, added 874,000 new subscribers in the first quarter of 2000. The company claims that its growth this quarter was affected by the company’s push to eliminate less-profitable customers who use older analog phones and prepay their service. Sprint PCS said its stronger-than-expected growth is a result of continuing strong gains in new acquisitions and improving customer retention.