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Jul 24, 2020

Verizon enrolls COVID-affected users in extended payment plans

A pedestrian passes in front of a Verizon Communications Inc. store in Chicago.

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Verizon Communications Inc. has enrolled its COVID-affected customers in extended payment plans after the pledge to keep them connected expired at the end of June.

Chief Financial Officer Matt Ellis was asked on the company’s second-quarter earnings call about customers who face financial hardship due to the pandemic. He said about 1.5 million people are signed up under the pledge. Of those customers, about 300,000 haven’t made payments. AT&T Inc. said Thursday that it had 338,000 nonpaying customers.

With phone connections an essential lifeline, the nation’s top wireless carriers, including Verizon and AT&T, agreed to keep serving customers even if they couldn’t make their bill payments.

The Keep Americans Connected pledge expired June 30. AT&T said it was working to retain its customers. Verizon is taking the payments owed by its customers and spreading them out over several months on top of the regular bills.

There’s always a portion of customers that don’t pay their bills, and the numbers due to COVID“are not too dissimilar to what we’ve always seen,” Ellis said. “The numbers we have don’t concern me.”

Verizon set aside a US$220 million cash reserve in the first quarter to cover nonpayments due to COVID, and the company didn’t add to that total in the second quarter, even as the spread of the coronavirus has accelerated.

“Our business is performing well,” Ellis said. “The macroeconomic environment will be the biggest determiner of whether we have to adjust those reserves. We’ll just have to wait to see how it plays out.”

Verizon shares were up 1 per cent to US$56.40 at 11:33 a.m. in New York. The stock is down 8.2 per cent this year, compared with a 24 per cent fall for AT&T and a 34 per cent rise for T-Mobile US Inc.