Verizon Communications (VZ) is facing softer postpaid net additions in Q1 amid increasing competitive pressure, RBC Capital Markets said in a note to clients emailed Tuesday.

The investment firm said it now expects a decline of 205,000 in Q1 retail postpaid phone net adds, versus its prior estimate for a decline of 10,000 and consensus estimate of a 45,000 decrease. It also expects retail postpaid other net adds of 303,000 versus prior estimate of 318,000 and consensus estimate of 346,000.

"We have trimmed our estimates for postpaid net additions, reflecting a more competitive start of the year and the exclusion of second number additions from the [key performance indicators]," RBC said.

RBC said it now expects Verizon to post Q1 revenue of $33.4 billion, compared with consensus estimates at $33.5 billion, up 1.2% year over year. It expects Verizon's Q1 earnings before interest, taxes, depreciation, and amortization to increase 1.8% year over year to $12.3 billion, versus consensus forecast at $12.4 billion.

"We expect the company's benefits from a low handset upgrade environment to be offset by marketing and subsidy efforts to offset a churn pick-up amidst low gross additions," RBC added.

RBC has a sector perform rating on Verizon and increased the company's price target to $45 from $42, citing "lower interest rates and the one-quarter roll-forward impacts in our [discounted cash flow] model," according to the note.