Verizon’s chief executive says the telecom giant is abandoning a long-standing reliance on free handsets to keep customers, instead betting that tighter service, smarter segmentation and faster fixes will drive retention and profits. Dan Schulman told investors on the company’s Q1 2026 earnings call that Verizon’s “turnaround is not only progressing, it is gaining momentum,” and that the carrier is shifting from device-driven promotions to putting customers and service quality at the center of its strategy.
Schulman was blunt about the move away from subsidies. “Not every retention is going to be a free handset,” he said, criticizing an industry habit of defaulting to giveaways as a one-size-fits-all solution. He argued Verizon can be “more-profitable when we start to micro segment and really listen to what a customer wants and not just give them a free handset for everything.” The CEO framed the change as a corrective to past decisions that inflated acquisition figures but did little for long-term satisfaction.
A concrete initiative underscoring the new approach is the deployment of home and office signal extenders — commonly called femtocells — to shore up indoor coverage where customers experience weak or flaky connectivity. Schulman said that, in many cases, sending customers a femtocell to install could have solved problems at roughly one-third of the cost of the remedies employed previously, while producing the happier, longer-lasting customer relationships Verizon now seeks.
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Verizon is also doubling down on faster troubleshooting and smarter operations through artificial intelligence. Schulman said the company is working with AI developers Anthropic and Google to accelerate diagnostics and improve network performance, aiming to deliver quicker, more accurate resolutions to customer issues. The carrier’s pivot includes broader service-based offerings and investments in customer experience that the CEO credited for the improved quarterly results.
The change of tactics comes as Verizon tries to convert positive quarterly momentum into sustainable growth. Executives said the recent quarter marked a rebound in results driven by service revenue and better customer experience — a dynamic that Schulman believes will be amplified by targeting offers to specific segments rather than broadly subsidizing devices. Industry observers have noted carriers long used handset promotions to boost short-term subscriber counts; Verizon’s leadership is now arguing those subsidies are a blunt instrument that can be replaced with lower-cost, higher-impact solutions.
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If successful, the shift could yield meaningful cost savings and stronger loyalty by addressing the practical frustrations that drive churn, such as poor indoor coverage or slow problem resolution. Schulman framed the philosophy change simply: treat people “like humans and not just another account.” How quickly competitors respond — and whether customers respond more favorably to service improvements than to the lure of free devices — will be a key test for Verizon’s new playbook in the coming quarters.
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