Oct 23, V7N- Verizon (VZ.N) announced higher-than-expected capital spending projections for 2025, exceeding market estimates, as the company focuses on expanding its high-speed internet services to compensate for the increasingly saturated wireless market. This news led to a more than 4% drop in its shares.

Verizon reported that third-quarter revenue fell below expectations due to a decline in wireless equipment sales, driven by customers spending less on phone upgrades amid high interest rates. Wireless equipment sales were down by 9%, overshadowing better-than-expected wireless subscriber growth.

To counter slower growth in the wireless market, Verizon, like its competitors, is emphasizing high-speed internet services, traditionally dominated by broadband companies such as Comcast. The company plans to double its fixed wireless service subscribers to 8-9 million by 2028. Notably, Verizon added 363,000 fixed wireless customers in the third quarter, surpassing its target of 4-5 million users 15 months ahead of schedule.

Verizon is also heavily investing in C-band spectrum to enhance its 5G coverage. It aims to equip 80% to 90% of its sites with C-band capabilities by the end of 2025. The company's capital spending forecast for 2025 is between $17.5 billion and $18.5 billion, higher than market estimates of $17.57 billion and above its projected 2024 expenditure.

Additionally, Verizon's acquisition of Frontier Communications for $20 billion is part of its high-speed internet expansion. However, some Frontier shareholders have raised concerns about the offer being too low. Verizon CEO Hans Vestberg assured that the deal was final and beneficial for all parties.

Despite some challenges, Verizon added 239,000 net monthly wireless subscribers in the third quarter, surpassing expectations. The company's "myPlan" customizable offering, which includes streaming services like Disney+, Hulu, and Max, has helped drive adoption. However, total revenue for the quarter, at $33.3 billion, slightly missed analysts' expectations of $33.43 billion. Adjusted earnings per share were $1.19, beating estimates by one cent.

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