Verizon expects 2016 earnings to plateau on shifting consumer demand

Verizon hinted that the consumer shift to monthly installment plans is disrupting the company's traditional business models.

Verizon updated its growth outlook Thursday, warnings that its earnings next year may plateau at the current level.

Analysts were expecting earnings of $4.04 per share in 2016, up slightly from $3.94 per share in the current fiscal year.

Speaking at an investor conference, Verizon chairman and CEO Lowell McAdam cited several near-term impacts including commercial model change in wireless, a pending $10.54 billion sale of its wireline assets to Frontier Communications, and the ramp up of new business models for wireless video and IoT.

Verizon, currently the No. 1 wireless carrier in the US, is trying to transform around shifting consumer demand, which is disrupting Verizon's traditional business models.

Customers have started moving away from subsidized hardware and two-year phone contracts, and instead are flocking to services that offer monthly installment plans. Even Apple has moved in that direction, launching its own upgrade program that allows customers to upgrade their iPhones to a newer model after paying 12 monthly installments.

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