Verizon’s wireless business slowed by coronavirus

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Verizon Communications Inc. said the coronavirus pandemic slowed its core wireless business in the March quarter as Americans bought fewer new smartphones amid widespread store closures.

The largest U.S. wireless carrier by subscribers tempered its financial forecasts for the rest of the year, lowering its profit goals and withdrawing its revenue targets. In the first quarter, the company reported a slight drop in wireless subscribers as gains in business accounts were offset by a steep decline in new consumer accounts.

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Verizon increased its bad debt reserve by $228 million based on the number of customers it expected won’t be able to pay their bills. It and other carriers signed a pledge with the Federal Communications Commission not to cut off service for 60 days or charge late fees to consumers facing pandemic-related hardships.

Rival AT&T Inc. set aside $250 million to cover bad debt from customers skipping payment and pulled its financial targets earlier this week.

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Verizon lost 68,000 postpaid phone connections during the first three quarters of the year, compared with a net loss of 44,000 such connections during the same period a year earlier. Retail store closures led to a “significant drop” in customer activity, the company said.

Postpaid phone customers are considered lucrative because they typically pay bills monthly under longer-term contracts and are less likely to switch carriers. AT&T added 163,000 postpaid phone subscribers during the first quarter.