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Verizon's customer gains hit by iPhone and flat rates

By CAROLINE GABRIEL

Published: 27 July, 2009

READ MORE: Metrics | US | Verizon | iPhone

Hard on the heels of AT&T's iPhone dominated quarterly results, Verizon Wireless announced a second quarter net gain of 1.1m customers, fewer than AT&T, which scored 1.4m (more than half of them for the Apple handset).

Verizon Wireless' net adds figure was also down on 1.5m a year earlier or 1.3m in Q109, though it still leads the market with 87.7m wireless customers, compared to AT&T's 79.6m. Verizon will not report full financial results until later today, but the net adds metric was probably the most closely watched this quarter, as analysts study the continuing impact of the iPhone on AT&T (ahead of a possible loss of its exclusive as early as 2010), and the success of fightbacks like Verizon's BlackBerry Storm or Sprint's Pre.

Piper Jaffray analyst Chris Larsen told Reuters that he estimated this quarter to be Verizon's lowest quarterly net subscriber growth since 2003, attributing this to the iPhone effect and also, at the lower end, to the rising interest in flat rate, prepaid plans like Sprint's Boost Mobile $50 deal, and rival offerings from Leap Wireless, T-Mobile and MetroPCS. This challenge will only get worse as the effects of recession are still felt on consumer spending, and new flat rate players like MVNO TracFone.

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