Hans Vestberg
Chairman and Chief Executive Officer at Verizon Communications
Thank you, Brady, and good morning to everyone. I'm pleased to share our strong third quarter results, making another quarter with solid growth and improving profitability. It is clear that our strategy is working. In both the consumer and the business groups, we're executing a segmented, agile strategy, that provides value to our customers and our bottom line. We have delivered growth in each of the areas we asked you to grade us on: wireless service revenue, EBITDA and free cash flow. This is evidence that we have the right strategy, and are achieving our results in a financially disciplined way.
Now, let me share our financials for the quarter. Our third quarter wireless service revenue is up 2.9% year-over-year, driven by expanding and deepening our customer relationships. This revenue growth is a key driver for adjusted EBITDA of $12.2 billion for the quarter, which is higher than both Q3 last year and sequentially. Our year-to-date free cash flow of $14.6 billion is already exceeding our full-year free cash flow for 2022, thanks to our focus on high-quality revenue growth, disciplined promotional strategy, cost efficiency and capex reduction of the recent years of heightened capital intensity driven by the C-Band and fiber investments.
I'm proud to share that my team and I have taken actions to further our position of financial strength. Our strong cash generation enabled us to reduce net debt, strengthen our balance sheet and deliver a higher dividend to our shareholders. We are working to bring our leverage ratio to pre-spectrum acquisition levels. During the third quarter, we paid down $2.6 billion in debt and increased our dividend for the 17th consecutive year, a current industry record that we take pride in. Our dividend coverage is very healthy. Year-to-date, our free cash flow dividend payout ratio is approximately 56%, a significant improvement from a year ago. In summary, in spite of an uncertain economic environment, we're on pace to finish 2023 strong. We're confident that we will deliver on the financial guidance that we issued to you at the start of the year, and this morning are announcing higher free cash flow guidance for 2023. Tony will provide you more details in a few moments.
Now, let me share more on how our business units are driving our strategy forward. In the quarter, we delivered on our key growth areas, mobility, broadband and private networks, thanks to our network, scale and technology advantages. In consumer mobility, we achieved sequential and year-over-year improvement in postpaid phone net adds by continuing to put the customer at the center of everything we do. Rather than engaging in aggressive promotional activity, like others in the industry, we're offering our consumers optionality and flexibility to choose how they want to use our products and services.
Our differentiated approach of segmentation, financial discipline is paying off with growth in postpaid phone gross adds and lower promotional cash cost. There is more work to be done, but our responsible approach position us to grow subscribers profitably. Since its launch in May, my plan continues to deliver a personalized experience, giving our customers the value, choice and control that they want. During the third quarter, we enhanced my plan by adding Ultimate Unlimited, a third tier with more value and services, further increasing our premium mix and ARPA growth. This is just one example of the flexibility and speed-to-market that my plan provides, and I'm excited about what is to come.
Our targeted and segmented market approach also served us well during the iPhone 15 launch, and we continue to execute with an eye towards meeting our customers' needs while maintaining a disciplined approach. Our competitive position is now stronger, and we delivered positive consumer postpaid phone net adds in the month of September. We anticipate that momentum will continue as we are on-track to exceed our postpaid phone net adds from Q4 of last year. Postpaid phone churn levels are stable, even with our targeted pricing actions throughout the year. We continued to see muted upgrade levels, which is something we're watching carefully, and it's a trend we expect will continue for the next few quarters.
Turning to business mobility, Verizon Business Group delivered 151,000 phone net adds and reached our ninth consecutive quarter above 125,000. Businesses and governments continue place an increased emphasis on best-in-class, reliable connectivity that only Verizon provides. Across mobility, postpaid phone net adds were 100,000 compared to 8,000 last year. We are the largest customer base in the industry, and are still finding new ways to add customers through innovation, service quality, and a variety of offerings and partnerships that competitors cannot match.
As we discussed before, we are seeking the optimal balance between price and quantity that allow us to grow our base profitably. In our value business, we have had negative volumes, but I'm encouraged by our quarter-over-quarter improvements. As I've said before, the value basis is a key part of our growth strategy, and we will continue to invest in it and adjust to the needs of the market. As we mentioned last quarter, we believe, we've seen the bottom for prepaid volumes and the team is committed and working daily to grow our value business.
Moving to broadband. We delivered another strong quarter with more than 400,000 new subscribers for the fourth quarter in a row. We finished Q3 with 10.3 million broadband subscribers, up by more than 1.7 million subscribers from a year ago, a 21% increase. Critical to the strength of this key area is fixed wireless access, something you know we deeply believe in. Our fixed wireless access net adds of 384,000 continued to be strong even with the recent $10 increase for new bundle customers, further evidence of the demand for our product.
Where FWA is available, our customers take it and love it, as seen by the high net promoter score. I am excited to also share that on the Fios side, we had 72,000 Internet net adds for the quarter, up almost 20% year-over-year, and one of our best performances in seven years. Fios remains a coveted, high-quality service and we continue to take share and delivered strong numbers even in a lower mover environment. When it comes to private networks, we see demand for the product continued to grow, especially those solutions built with licensed spectrum, which provides a more secure and differentiated experience for the end-users. Businesses are increasingly looking to us for the private network solutions, helping to grow our sales funnel and scale the number of installation each quarter.
Let me end by talking about the backbone of our business, our network. During the third quarter, we obtained early access to our remaining C-Band spectrum. In urban markets, where a C-Band is already deploying, we're firing on all cylinders and leveraging its full potential through software upgrades, delivering two times to three times more spectrum depth. As a result, peak speeds go from 900 megabits per second to an amazing 2.4 gigabits per second, enabling an even better experience for our customers.
You've heard me say this before, but let me say it again, C-Band is a game change for our business, giving us better customer retention and step-up, as well as, strong broadband opportunity with fixed wireless access. Everyday, we see the benefits of our generational investment in C-Band spectrum and the impact it will have for our customers for years to come, and our network is winning. This quarter we received J.D. Power awards in all six US regions, receiving the most award for wireless network quality for the 31st time in a row.
We are the best network in the market, and we will extend our lead as we complete our C-Band deployment; first, augmenting urban areas, and next year in suburban and rural markets. This is our key differentiator, and the center of everything we do. And we're doing all of this in a responsible way. We're optimizing our network while returning to business-as-usual levels of capex. We're finding cost efficiencies across our business, both as a result of our new structure, and by emphasizing profitability when evaluating new opportunities like within business wireline. Our cost efficiency program remains on-track to meet our savings goal of $2 billion to $3 billion annually by 2025.
Now, let me turn the call over to Tony to discuss our financial and operational performance in more detail.
