Increased competition from AT&T and T-Mobile saw the wireless provider lose roughly 138,000 postpaid customers in the first quarter of the year. The company has seen a steady rise of customers in the last few years.
"To see Verizon actually losing phone customers is a shocking turnaround," said Craig Moffett, an analyst at MoffettNathanson. "Verizon has been the growth leader of the industry every quarter since they got the iPhone."
First-quarter profits more than doubled to $3.95 billion, as revenue rose 4.8 percent to $30.8 billion. During the quarter, Verizon completed the purchase of Verizon Wireless, buying Vodafone's 45 percent stake in the company.
To make up for the loss of mobile customers, Verizon added 634,000 tablet users. But that was trumped by the 625,000 added by AT&T. This is the first time since 2010 that AT&T has outpaced Verizon in total customers added.
Like the AT&T Next plan, Verizon’s Edge service sells smartphones at full cost to customers over two-year subscriptions. But this means customers will have lower monthly bills than subscribers on contracts, potentially squeezing margins.
“Subscriber trends in the quarter are a clear sign that competitive activity is starting to take its toll,” said Jonathan Chaplin, an analyst at New Street Research. “We remain concerned about the headwind from rising competitive intensity.”
Verizon's Pay TV service FIOS added 57,000 customer, the fewest ever, to 5.3 million subscribers. The network’s Internet users climbed by 98,000 to 6.2 million.