Verizon Communications Inc. reported a larger-than-expected decline in mobile-phone subscribers in the first quarter, the result of heavy competition and less spending by government agencies.

Verizon added 1.7 million consumer wireless retail postpaid phone subscribers in the first quarter on a gross basis, which doesn't account for churn. That's down 1% year over year. In terms of net adds, which does account for churn, that translates into a loss of 356,000 subscribers in the quarter.

Verizon lost more postpaid subscribers than expected in the first quarter but said it’s seeing better trends in April. Plus, the latest financial results were healthy.