Analyst says wireless customers are embracing T-Mobile and have a "lower perception of Verizon"
According to the latest data computed, T-Mobile has taken the lead from Verizon in two metrics of customer satisfaction. Per LightReading, analysts at investment banking firm Evercore, in a note to investors, wrote, "When looking at US consumer perception/satisfaction of wireless services, we can see that both NPS (Net Promoter Score) and CS (Customer Satisfaction) scores have dropped since the end of 2020. Verizon, the historical industry leader, fell behind T-Mobile on both metrics in 2H22 and has remained so into February '23."
The Evercore analysts based the note on data computed by analytics firm HundredX which used a three-month rolling average of surveys filled out by wireless customers. And these surveys have helped define clear trends as noted by Evercore. "The most significant trends in wireless consumer perception over the past two years has been improved consumer perception of T-Mobile and lower relative perception of Verizon," the Evercore analysts stated.
While Verizon's Net Promoter Score and Customer Satisfaction scores have been unchanged over the last 18 months, there has been a huge improvement in T-Mobile's scores. There is one metric where Verizon continues to surpass T-Mobile and that is the Net Loyalty Score (NLI). But the investment bank thinks it knows why. "We believe this to be a byproduct of T-Mobile's customer base, which is more value-focused, and more likely to switch."
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The industry will start reporting first-quarter earnings next week giving Wall Street its first look at how things are going for wireless carriers in 2023. T-Mobile is expected to capture the lion's share of net new postpaid phone customer additions. That is perhaps the most important category that is reported by these companies. Wells Fargo expects T-Mobile to report the addition of 560,000 net new postpaid phone customers which it says will be the best results among the big three (Verizon, AT&T, T-Mobile).
While Wells Fargo sees T-Mobile announcing a sparkling first quarter of 2023, it sees the opposite for Verizon, which remains the nation's largest wireless carrier-for the moment. "We expect Verizon's Consumer Group to lose 285,000 phone customers in Q1, a modest improvement vs. Q1 a year ago but still not necessarily an ideal result," Wells Fargo analysts said.
While Main Street seems to continuing its embrace of T-Mobile, Wall Street is as well. T-Mobile's closing price on Tuesday of 149.51 is close to the 52-week high of $154.38. Verizon Communications (VZW), which includes all of Verizon's businesses, trades at $39.20 closer to its 52-week low of $34.55. Even more telling, while T-Mobile trades at over 64 times earnings, Verizon trades at only 7.75 times earnings. That means that investors are putting more value on each dollar that hits the bottom line at T-Mobile.
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