As growth in the wireless industry began to slow, wireless carriers gave away tablets to juice subscriber metrics. Hundreds of thousands of customers got a free generic Android tablet when signing up for a two-year tablet data plan, which often cost as little as $10 a month.
That decision is coming back to haunt the carriers, as many customers aren't renewing those data plans.
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In the first quarter, Verizon Communications Inc. shed 307,000 postpaid customers, driven in large part by tablet declines. Verizon lost 250,000 tablet subscribers in the quarter. During the same period last year, Verizon netted 507,000.
Verizon had expressed optimism about tablet growth. But many consumers have found they don't need a cellular connection for their tablet -- they can either use free Wi-Fi or link to their cellphone's connection to their tablet.
Verizon has said part of the problem was the fact the tablets were free. Charging even a small amount for the device ensures the customer is more likely to actually want it, and therefore less likely to cancel at the end of the contract. It has since curbed the free tablet offer.
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(END) Dow Jones Newswires
April 20, 2017 17:53 ET (21:53 GMT)