Verizon’s 5G gamble backfired and investors are still paying the price
Verizon Communications (VZ) may be one of America’s “Big Three” wireless providers, but the stock has been a persistent disappointment for investors.
Massive bets on wireless spectrum, intended to secure a leadership position in 5G, have yet to deliver meaningful returns, leaving the company burdened with a heavy balance sheet.
So far in 2025, Verizon shares are roughly flat, extending a pattern of underperformance that has persisted since at least 2023.
Over the past five years, the stock has fallen about 31%, a stark contrast to the broader S&P 500 Index, which has gained sharply over the same period.
The silver lining remains Verizon’s dividend. The stock yields approximately 6.8%, and the company has increased its dividend payout annually for over two decades, making it a staple for income-focused investors.
Still, valuation has been weighed down by Verizon’s debt load, even as revenue remains relatively stable.
Over the past decade, the company has spent more than $50 billion acquiring wireless spectrum, particularly to support its 5G rollout. Much of that spending was financed with debt, leaving Verizon with one of the heaviest balance sheets in corporate America.
That leverage has become increasingly costly. Rising interest rates since 2022 have pushed up interest expense, squeezing free cash flow and limiting the company’s financial flexibility.
Compounding the problem, the long-promised payoff from 5G has yet to materialize.
Wall Street once expected the technology to usher in a new era of pricing power for telecom providers. Instead, competition has kept wireless pricing tight, and customers have shown little willingness to pay meaningfully more for 5G service.
Verizon in 2025
Verizon’s challenges in 2025 have been compounded by difficulty retaining wireless customers as competition across the industry intensifies.
While the company reported higher revenue in the third quarter, much of that growth stemmed from increased monthly rates and fees rather than expanding its subscriber base.
As Bloomberg reported, the strategy amounts to “squeezing money from a shrinking customer pool,” a dynamic that raises questions about the durability of Verizon’s revenue gains.
In response, Verizon’s leadership has signaled a more aggressive push for change. The recently appointed CEO, Dan Schulman, has pledged to overhaul the company’s cost structure, improve customer service, and reignite growth in mobile subscribers as Verizon seeks to reverse years of stagnation and regain investor confidence.
Verizon has significant catch-up work ahead. Industry analysts have long warned that rivals T-Mobile and AT&T would pull ahead by leaning into more aggressive pricing and promotions.
T-Mobile, in particular, also benefited from an earlier and more efficient rollout of mid-band 5G spectrum that translated into faster network performance and sustained market-share gains.