(Reuters) -Verizon Communications ( VZ ) forecast annual free cash flow and profit below Wall Street estimates on Friday, as the U.S. telecom major spends heavily to expand high-speed internet services and attract customers in a saturating wireless market.

The company has been pouring billions of dollars on the C-band spectrum, prized for its balance of speed and range, to improve its 5G offering and outpace rivals AT&T and T-Mobile.

The spending is also key to hitting its goal of doubling subscribers for its fixed wireless service to as much as 9 million by 2028.

Shares of the New York-based company rose about 1% in premarket trading.

The 2025 forecast followed a strong fourth quarter for subscriber growth as wireless additions hit a 5-year high thanks to its customizable myPlan, Black Friday promotions and trade-in deals for the AI-powered iPhone 16 series.

Verizon expects 2025 adjusted profit to grow between 0% and 3%, with the midpoint coming in below analysts' estimates for growth of 2.7%, according to data compiled by LSEG.

Free cash flow, a metric that helps investors determine dividend, is expected to be between $17.5 billion and $18.5 billion this year. The midpoint was below estimates of $18.44 billion, according to Visible Alpha.

Faced with slowing growth in the U.S. telecom market, Verizon and its rivals have been betting on a ramp-up of high-speed internet services to attract subscribers. The company agreed to buy Frontier Communications in a $20 billion deal last year.

In October, it projected 2025 capital spending between $17.5 billion and $18.5 billion, compared with $17.1 billion in 2024.

In the fourth quarter, Verizon added 568,000 monthly bill-paying wireless subscribers, outpacing FactSet estimates of 487,500 additions. It benefited from price increases implemented in 2024 and the popularity of myPlan, which comes with streaming perks including Disney+, Hulu and Max at an extra cost.

Wireless equipment revenue grew about 1% to $7.5 billion in the fourth quarter thanks to higher device upgrade volumes. Overall revenue was $35.7 billion, slightly above estimates of $35.32 billion.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Devika Syamnath)