Verizon CEO Adjusts Perspective on Free Phones as Compensation for Service Issues, Emphasizes Profitability Through Customer Feedback

While offering freebies may initially draw a significant number of customers for a telecom giant like Verizon, CEO Dan Schulman is reassessing the effectiveness of this strategy. He has shifted focus from temporary incentives towards an essential aspect of customer loyalty: exceptional service. Schulman believes that by truly valuing and acting upon customer feedback, Verizon could have significantly lowered costs and maximized profits. Fortunately, the company has discovered a promising avenue to enhance customer service and satisfaction.

Verizon’s Approach: Enhancing Connectivity with Femtocells

In the recent Q1 2026 earnings call, Schulman highlighted the company’s progress in reinventing its customer service strategy, stating, “Our turnaround is not only progressing, it is gaining momentum. We are beginning to reclaim our market leadership by putting the customer at the center of everything we do.”He attributed the company’s improved financial outcomes to a greater focus on service-driven offerings and enhancing customer experiences.

Verizon is now pivoting away from conventional customer incentives like complimentary phones. Instead, the company is committed to delivering higher-quality service and better network connections. Schulman emphasizes that true profitability comes from understanding and addressing customer needs rather than depending on promotional giveaways. This marks a crucial shift in Verizon’s business philosophy.

“Not every retention is going to be a free handset. I think our industry has been too dependent on free handsets being the solution for everything, and I think all of us — and I know, for sure, 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.”

To address connectivity challenges, Verizon has introduced 4G and 5G wireless extenders, known as femtocells. These devices significantly enhance signal strength in areas with poor connectivity, such as homes and workplaces. Schulman remarked, “If we had listened and sent a femtocell to be installed at the house, we could have done that at one-third the cost and made the customer happy.” This proactive approach underscores Verizon’s commitment to customer satisfaction.

Moreover, Schulman insists on treating subscribers as individuals, not merely as account numbers. To expedite troubleshooting processes and provide timely solutions, Verizon is harnessing artificial intelligence (AI).Partnering with developers like Anthropic and Google, the telecom is exploring innovative methods to refine network performance and further elevate customer satisfaction.

In summary, as Verizon transitions from offering handsets to enhancing service quality, it is poised to redefine its relationship with customers. This shift, driven by genuine engagement and thoughtful responses to feedback, could set a new standard in customer service within the telecommunications industry.

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