Verizon CEO doubles down on removing free lines and handsets for customers

Verizon has been working to recover from several years of elevated customer losses in its wireless business. The company has revamped its promotional strategy in recent months to rebuild customer loyalty. However, some of the changes include scaling back free offers.

Over the past three years, Verizon saw 2.25 million customers pull the plug on service. The company's CEO, Dan Schulman, said during an earnings call in January that the losses were "largely from prior pricing actions as well as competition."

Verizon has since increased its focus on adding more value to its offers and removing friction from the customer experience. It has also vowed to cease enforcing price increases without corresponding value, which Schulman said has irritated customers over the past few years.

In addition, the carrier ramped up its efforts to offer bundled phone and internet service deals to customers, which it believes will help it lower churn. To accelerate this process, Verizon completed its $20 billion acquisition of Frontier Communications in January, allowing it to expand its wireless and fiber internet footprint nationwide.

Verizon's recent changes are starting to have a ripple effect

Amid these efforts, Verizon added 55,000 new postpaid phone customers in the first quarter of 2026, according to its latest earnings report.

However, its wireless retail postpaid phone churn, the amount of smartphone customers who canceled service, hit 0.97% during the first quarter of 2026. This is two basis points higher than the churn it reported for this segment a year before.

During an earnings call on April 27, Schulman revealed that the company's consumer postpaid phone churn, which only includes residential lines, reached 0.9% in the first quarter. This reflected an improvement of 5 basis points from the fourth quarter of 2025.

Related: Verizon CEO shifts gears after 2.25 million customers depart

Schulman said the company's performance in the first few months of 2026 shows its turnaround plan is "progressing" and "gaining momentum."

"As expected, when we stop imposing blunt price increases without corresponding value on our customers and begin to remove friction from the end-to-end customer experience, they reward us with their loyalty," he said.

He also highlighted that the company has begun embedding artificial intelligence and automation into its operations and customer interactions, which is already "significantly improving customer experiences and lowering costs."

As these changes took place, Verizon generated $34.4 billion in total operating revenue during the first quarter, reflecting an almost 3% year-over-year increase.

Shutterstock/Brandon Klein

Verizon CEO warns some free customer perks are being cut

Despite recently lowering costs, Schulman said Verizon plans to spend less on promotional offers to help drive stronger revenue growth. This includes ending free-line offers, which the company has used in the past to attract new customers and retain those on the verge of switching to another carrier.

"Our new accounts are being added with more lines per account, or percent of new to Verizon continues to climb, and that's a leading indicator of where our account number is headed next," said Schulman. "But we're also very focused on driving higher revenue with every line. We are no longer giving away lines for free."

In addition to ending free line offers, Schulman also said that Verizon is straying away from giving free handsets to customers.

"The era of just the free handset, that's gone right now," he said. ‘We are looking at what does the customer need. They have a handset that is last year's model that's been refurbished. Do they need a new handset? Many of them, because of the economy, are keeping their handsets longer right now."

Many consumers have indeed been holding onto their phones for longer periods of time as they face economic pressures, a survey from Reviews.org found in September last year.

How often Americans upgrade phones:

• The average American keeps their phone for about 29 months.
• The iPhone 13 is the most commonly owned iPhone model.
• On average, consumers pay $634.35 for their smartphone. This is significantly less than the list price of most new premium phones, which are often over $1,000.
• The top three reasons consumers upgrade their phones are: faster performance (22%), battery issues (18%), and wanting new features (13%).
  
  Source: Reviews.org

"It shows that people aren't going for the latest and greatest phones," said Kelly Huh, a staff writer at Reviews.org, in a statement to USA Today. "They're getting a phone used, or getting a hand-me-down."

Schulman said that the wireless industry as a whole "has been too dependent on free handsets being the solution for everything." He said that Verizon can be "much more profitable" if it really listens to "what a customer wants and not just give them a free handset for everything."

"If a customer calls us and says that they're having a difficulty with service in their home, previously, what we would have done is send them a free handset so that they wouldn't churn," he said.

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"And what happened at that point is the customer, who has a new handset, still has poor service at their home," he continued. "So we just spent like $1,000 and did not solve the customers' issues. If we had listened and sent a femtocell to be installed at the house, we could have done that at 1/3 the cost and made the customer happy."

He said that, going forward, the company will be "much more disciplined" in how it thinks about customer retention.

"Not every retention is going to be a free handset," said Schulman.

In a report to analysts, which was obtained by Fierce Network, MoffettNathanson analyst Craig Moffett raised concerns about Verizon's recent customer losses and questioned its strategy to cut costs.

"Better postpaid phone net adds is great… but not when it comes with a sizable loss of accounts," wrote Moffett. "And sharply lower ARPU (average revenue per user) and ARPA run counter to the narrative of reduced promotionality and greater discipline," he said in a report for investors.

Related: Verizon raises price on key discounted offer for customers

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This story was originally published May 5, 2026 at 2:03 PM.