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Verizon’s Warning on Slow Subscriber Growth Triggers Telecom Selloff

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Verizon Communications issued a warning about “soft” wireless subscriber growth in the first quarter, citing off-season promotions by competitors that have continued despite the typically slow post-holiday period. The announcement caused Verizon’s shares to plunge more than 7% on Tuesday, sparking a broader selloff in the U.S. telecom sector.

Chief Revenue Officer Frank Boulben, speaking at Deutsche Bank’s Media, Internet & Telecom Conference, noted that Verizon pulled back on customer incentives after an aggressive December quarter, while rivals maintained their promotional strategies, intensifying competition.

AT&T shares fell 5.3% as the company also reported elevated subscriber churn in January, while T-Mobile US saw a 4% decline. Analysts point to a shrinking pool of potential new mobile subscribers in an increasingly saturated market, with broadband giants like Comcast stepping up competition by targeting wireless customers.

Verizon also flagged a “slow start” for phone upgrades in the first quarter, attributing it to economic uncertainty and a lack of major new smartphone features. However, the company reaffirmed its annual target for single-digit growth in phone upgrades and expects a stronger rebound later in the year. Verizon anticipates adding more monthly-bill paying wireless subscribers in 2025 than the 900,000 it gained in 2024, supported by its customizable myPlan offerings.

Minimal Impact from Immigration Crackdown

Verizon and AT&T downplayed concerns about potential customer losses due to tighter U.S. immigration policies. President Donald Trump’s administration has intensified immigration enforcement, raising concerns about a reduced pool of new telecom customers. However, Boulben stated that any impact would be minimal, primarily affecting the low-end prepaid market rather than postpaid contracts that require formal identification.

Limited Threat from Satellite Internet

Both Verizon and AT&T dismissed concerns over competition from satellite internet providers like SpaceX’s Starlink, emphasizing that traditional wireless services remain more reliable and cost-effective. AT&T CFO Pascal Desroches acknowledged the potential of satellite-to-cell connectivity but described it as a limited business opportunity at present.

Meanwhile, T-Mobile has announced plans to launch its satellite-to-cell service with Starlink in July, priced at $15 per month.

Musk’s Starlink Denies Intent to Take Over FAA Air Traffic Contract

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SpaceX, the rocket company owned by Elon Musk, has denied media reports suggesting that its Starlink satellite unit intends to take over any Federal Aviation Administration (FAA) telecommunications contract. On Wednesday, SpaceX clarified that Starlink’s role is to potentially serve as a partial solution to the FAA’s aging system.

“Starlink is a possible partial fix to an aging system. There is no effort or intent for Starlink to ‘take over’ any existing contract,” SpaceX stated on X (formerly Twitter). The company further explained that it is working alongside L3Harris Technologies and the FAA to explore how Starlink could enhance aviation safety by upgrading infrastructure.

The FAA confirmed it is testing Starlink systems at various sites as part of a broader effort to modernize the U.S. air traffic control infrastructure, which has been deemed outdated. The Government Accountability Office (GAO) has warned that about one-third of the FAA’s air traffic control systems are unsustainable and in need of urgent replacement.

The FAA emphasized that it is testing Starlink and other technologies through its Telecommunications Infrastructure program, managed under a contract with L3Harris. While reports have suggested that Starlink could potentially replace Verizon’s existing $2.4 billion contract, the FAA has stated that no decision on the contract’s future has been made yet.

The testing of Starlink at FAA facilities, including those in Alaska, Oklahoma City, and Atlantic City, is part of efforts to improve communication systems and restore reliable access to weather information for pilots.

Transportation Secretary Sean Duffy also highlighted that while Starlink could be a part of the solution, it is not the sole answer to the FAA’s modernization needs.

T-Mobile and Starlink to Launch Satellite Connectivity for $15 a Month

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T-Mobile has announced that it will launch its satellite-to-cell service, powered by SpaceX’s Starlink, in July at a cost of $15 per month. The initiative aims to eliminate mobile dead zones and provide connectivity to remote areas, marking a significant advancement in mobile technology. T-Mobile’s shares rose by approximately 4% in premarket trading on Monday following the announcement.

The satellite service will address coverage gaps in regions of the U.S. that are inaccessible by traditional cell towers, with T-Mobile stating that 500,000 square miles of such areas will now have connectivity. A beta trial for the service began on Sunday, with T-Mobile offering the service free to customers until the official launch. After that, the service will be included at no additional cost for customers on the premium Go5G Next plan. Other plan customers will receive a 33% discount when the service officially launches.

In a groundbreaking move, T-Mobile will make the Starlink service available to customers of all U.S. wireless providers, including AT&T and Verizon, without requiring them to switch. The initial beta version of the service will provide text messaging via satellite, with voice and data features planned for later.

Mike Katz, T-Mobile’s president of marketing, strategy, and products, emphasized that the service is unique in the U.S. and will work across most smartphones from the last four years, thanks to partnerships with Apple and Google for seamless integration with their operating systems. This satellite service is expected to revolutionize connectivity for users in hard-to-reach areas.