Verizon lifts annual forecasts, signs more than $2 billion AI infrastructure deal with AWS

Oct 26 — Verizon raised its annual forecast for wireless subscriber additions on ​Monday, betting on strong demand for its simplified plans, and signed an AI infrastructure deal worth more than $2 ‌billion with Amazon Web Services.

For the third quarter, the telecom carrier reported nearly ⁠double the analysts' estimate ​for gains in monthly-bill paying ⁠wireless subscribers at 406,000, against Visible Alpha expectations of ‌209,439.

• Verizon now expects ‌to add between 1.1 million and 1.2 million ⁠postpaid phone subscribers this year ⁠compared with earlier projections of 750,000 to 1 million

• It also raised its full-year adjusted earnings per share forecast to $5.04 to $5.06, from $4.99 to $5.04 earlier

• However, third-quarter revenue of $34.3 billion fell short of analyst estimates of $34.74 billion, according ‌to LSEG data

• Revenue was pressured ​by lower device upgrade volumes after Verizon began cutting device subsidies. Verizon expects this trend to continue in the fourth quarter.

• Verizon shares fell 2.5% in early trading

• Under its deal with Amazon's cloud unit, Verizon will provide high-capacity fiber-optic connectivity for AWS data centers

• CEO Dan Schulman said ​in the post-earnings call the company was in talks with ‌additional hyperscalers, neocloud providers ‌and ⁠large enterprise clients to supply dark or lit fiber connectivity

• Meanwhile, commenting on SpaceX's plans to enter the mobile market, Schulman said building a competing terrestrial network would take four to six ‌years and cost $300 billion ​to $500 billion

• Verizon would be "ferociously ‌competitive" once SpaceX ⁠enters the ​market, he added

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by ​Jonathan Ananda)

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