Verizon reported its strongest third-quarter subscriber growth in five years, adding 406,000 postpaid phone customers, but shares slipped as investors focused instead on the long-term competitive threat posed by SpaceX's growing wireless footprint.
The carrier said service revenue rose 2.9% from a year earlier to $23.5 billion, while free cash flow climbed 12.1% to $7.8 billion. Verizon also added 137,000 postpaid net accounts in the quarter, its best performance on that metric in more than a decade, and raised its full-year outlook on the back of the results.
A strong quarter overshadowed
Despite the beat, Verizon shares fell alongside those of rival carriers AT&T and T-Mobile after SpaceX reported its own results, which investors read as evidence the satellite company is edging closer to offering real wireless competition without the enormous cell-tower buildout traditional carriers have relied on for decades. SpaceX's roughly $8 billion spectrum acquisition earlier this year has already unsettled telecom investors, who worry that direct-to-device satellite service could eventually chip away at the pricing power of ground-based networks, particularly in rural areas where traditional coverage is thinnest.
Verizon executives have argued that satellite connectivity is more likely to complement, rather than replace, traditional wireless networks for the foreseeable future, pointing to the capacity limits of satellite spectrum compared with dense urban cell networks. Investors, for now, appear to be pricing in at least some risk that the competitive landscape shifts faster than that argument assumes.
Guidance raised regardless
Verizon's decision to raise its full-year outlook despite the share price reaction suggests management sees the current subscriber momentum as durable, built on a mix of promotional pricing and network investment rather than one-off gains. The company's post-paid phone additions, in particular, reverse a multi-year stretch of sluggish growth that had weighed on the stock, giving Verizon a rare positive subscriber story to tell even as the broader market narrative around satellite competition continues to dominate the conversation among telecom investors.
