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Verizon Says Heavy Promotions Will Dent Otherwise Strong Fourth Quarter

Demand is strong, but a competitive market will impact per-share earnings and profit margins.

Mario Tama/Getty Images

Verizon said on Monday that it is seeing “very strong customer demand for 4G smartphones and tablets” in the current quarter, but added that promotional costs will dent near-term earnings.

“The company expects that the fourth-quarter impacts of its promotional offers, together with the strong customer volumes this quarter, will put short-term pressure on its wireless segment (profit margins) and earnings per share,” Verizon said in a press release.

It is the clearest sign yet that intense price competition from T-Mobile and Sprint is starting to impact the dominant carriers, AT&T and Verizon.

The announcement comes ahead of the company’s full earnings report, which isn’t due out until Jan. 22.

Verizon also said that nearly 25 percent of upgrades are using the company’s unsubsidized Verizon Edge program, where customers pay for their device in installments. That’s up from 12 percent as of last quarter.

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