Verizon is seeing a concerning shift in customer behavior despite recently improving customer retention in its wireless business.
The carrier revealed in its latest earnings report that it added 406,000 new postpaid phone customers in the third quarter of 2026, up more than 820% year over year. Its wireless retail postpaid phone churn (the percentage of customers who canceled their service) also hit 0.94% during the quarter, down from 0.98% in the same period in 2025.
These improvements follow Verizon CEO Dan Schulman’s pledge earlier this year to remove customer pain points and avoid price increases without corresponding value, in an effort to curb switching behavior.
The carrier later launched lower-priced wireless plans: Simplicity and Verizon One in June, along with a new loyalty program.
“The customer value proposition we launched in mid-June continues to deliver beyond our expectations,” said Schulman on an Oct. 26 earnings call.
Verizon customers are putting off phone upgrades
Despite seeing success in attracting and retaining customers, Verizon is noticing that many are avoiding device upgrades.
During the third quarter, upgrade volumes among Verizon customers declined more than 20% year over year. The carrier’s equipment revenue during the quarter was down 9% from the prior year, which Verizon said in the earnings report was “primarily from significantly lower upgrade volumes.”
On the earnings call, Verizon Chief Financial Officer Tony Skiadas said that the company’s “continued focus on microsegmentation,” its “disciplined approach to upgrades,” and “customer-first focus” all contributed to lower upgrade volumes during the quarter.
“With the success of Simplicity and our focus on giving more choice to customers, we expect the trend of lower upgrades to continue in the fourth quarter,” said Skiadas.
Read more: Verizon launches generous customer perks after raising prices
Verizon customers are pulling back on upgrading their devices as smartphone prices increase worldwide. This is due to the global memory chip shortage, which has inflated component costs.
Global smartphone retail prices have increased by 20% so far this year. Global smartphone shipments also declined 20% year over year in the third quarter of 2026, the lowest third-quarter level since 2012, according to data from Counterpoint earlier this month.
“Q3 was the second successive quarter to take the full brunt of the memory crisis,” said Shilpi Jain, a senior analyst at Counterpoint, in a press release. “The extreme memory shortage is pushing the smartphone market into a more selective phase, reshaping OEM (original equipment manufacturer) strategies and even consumer behavior.”
“Consumers are holding on to their devices longer than estimated, increasingly considering refurbished devices and prioritizing higher-value devices, while OEMs are adjusting portfolios, pricing, and market strategies to protect profitability,” she continued.
Amid this trend, a recent Reviews.org survey found that Americans, on average, are opting to upgrade their phones every 32 months in 2026, which is three months longer than last year, mainly because new phones are getting pricier.
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Verizon recently reduced free phone offers for customers
Verizon is seeing a decline in phone upgrades after scaling back its free-handset deals earlier this year, driven by evolving consumer habits.
“The era of just the free handset, that’s gone right now,” said Schulman on Verizon’s earnings call in April. “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.”
On the carrier’s Oct. 26 earnings call, Schulman emphasized that it was the right decision to make for the company.
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“I said a year ago that we were no longer going to be prey, that we were going to stop losing market share, and that was true this quarter,” said Schulman.
“We did all of that in what I think was a very fiscally responsible manner,” he continued. “We’re competing the right way to win in the market. We aren’t competing on promotions or free phones or subsidies, which, by the way, to me, gives no one in the market any competitive advantage.”
He said that Verizon has instead sharpened several areas in its business to “gain competitive advantage” in the wireless market.
“The way to gain competitive advantage is to make sure that you look at your overall end-to-end customer experience, your value proposition, the strength of your network, because there you can create sustainable and lasting competitive advantage,” said Schulman. “Clearly, our value proposition is resonating with our customers.”
As Verizon sees success in retention and mobile account additions, Schulman said that customers could potentially see higher wireless prices in the future.
“I’m not against taking up pricing as long as we add value to that,” he said. “In the past, we took up pricing without adding any value to customers, and eventually that comes back to haunt you.”
“Your churn starts to go up,” he continued. “You lose the trust of your customers. We’ve added a tremendous amount of value in the last year, and there’s potentially room for us to adjust that price-to-value equation by increasing pricing as well.”
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