Verizon is feeling the competitive heat. The nation’s largest wireless carrier suffered a decline in the first quarter and warned that its earnings growth would be at the lower end of its previous expectations. 

Verizon lost 292,000 consumer postpaid phone subscriptions, the metric used by the industry as an indicator of success. In a Friday press release on its earnings for the quarter, Verizon chalked the loss up to “competitive dynamics.” On Thursday, rival AT&T reported first-quarter subscriber gains.

Verizon’s losses were largely offset by 256,000 business postpaid phone net additions, but the carrier is still concerned about the consumer losses, which mostly happened in March, when the first quarter closed, and into April, suggesting additional slowdown in the second quarter.

“We will continue to take appropriate measures to be competitive in the market,” Verizon Executive Vice President and Chief Financial Officer Matt Ellis said during the earnings call, though he didn’t offer specifics beyond comments about relying on the carrier’s network and flexible plans. 

Still, overall wireless services revenue was up 11.2% over last year, thanks in part to existing customers moving to pricier plans, as well as revenue from prepaid mobile company Tracfone, which appeared on Verizon’s books for the first time after the carrier finished acquiring the company last November. Verizon reported a loss of 80,000 Tracfone net phone subscriptions over the quarter, which the carrier pegged to the sunsetting of generous pandemic mobile service subsidies that benefited the prepaid company’s customer base. 

Verizon’s focus on wireless and broadband internet may take some time to attract more customers and offset losses, especially as it spends this year building out coverage of its so-called C-band range of 5G, which launched in January. The carrier is betting big on C-band radio frequencies as a lure for customers, with higher speeds and wider coverage of its 5G Ultra Wideband network. But this quarter’s losses suggest customers aren’t yet convinced.

After reaching C-band 5G coverage of 100 million people in January, Verizon has continued to activate more service and is on track to reach 175 million people by the end of 2022. At Verizon’s investor day in March, the carrier said it had reached agreements with satellite companies to access more C-band spectrum, which will speed up coverage of 40 million people in certain markets, a year ahead of Verizon’s expectations. 

Verizon has continued encouraging its existing customers to upgrade their phones, and 40% of customers are now using 5G handsets. That’s not much higher than the 33% reported in January. Numbers will slowly grow over the next year, with the carrier expecting six out of 10 customers to be using 5G phones by the end of 2023.

Verizon’s Fios fixed broadband added a modest 55,000 subscribers while its fixed wireless access, called Verizon 5G Home, continues to grow, with 112,000 net new customers. The carrier credited this to the wider availability of 5G Home thanks to the continued rollout of C-band service. Under current expansion plans, the service will cover 50 million households and 14 million businesses by the end of 2025. 

Verizon posted $33.6 billion in revenue in the first quarter, up 2.1% from the same period last year. With Tracfone in its portfolio, wireless revenue grew to $15.2 billion, up from $13.7 billion in the first quarter of 2021. This is partially offset by the lost revenue from Verizon Media Group, sold last year, which dropped service and other revenue by 2.5%. 

The carrier reported net income of $4.7 billion, or earnings of $1.09 per share. Its adjusted earnings came in at $1.35 per share, which is in line with analyst expectations per Yahoo Finance, but down slightly from $1.36 a share a year ago. 

Verizon shares fell 6.2% to $51.60 in recent trading.