CEO Hans Vestberg is focused on creating a Verizon turnaround and sustainable comeback. This has been the challenge he has been wrestling with since taking over the leadership position in 2018 from Lowell McAdam. Let’s take a closer look at how he is doing with the different sectors of the company and what we can expect going forward.
First, it is important to understand there are many different slices to the Verizon pie. One slice is consumer wireless. Another slice is business wireless. Others include consumer and business telecom, 5G Home, business internet, resale to MVNO wireless competitors and more.
Some areas are recovering more quickly than others. However, the company as a whole still struggles to find growth, and the clock is ticking.
Verizon in co-opetition with Xfinity Mobile, Spectrum Mobile, Betacom
Today, thanks to co-opetition, Verizon both competes with and works with many companies. So, in some cases, even if they are losing market share in one bucket, they can be building in another.
Example, consider Xfinity Mobile and Spectrum Mobile in their MVNO program. The good news is, even if Xfinity and Spectrum are showing growth, and taking market share, the Verizon wholesale business is still happy they are carrying that traffic.
Plus, the extra business they get from being connected to both Comcast and Charter Communications is an added bonus.
Another example is Verizon Business. This has as opportunity for growth as small and mid-sized businesses need to prepare for the 5G opportunity to transform their company and their sector.
Verizon Business showing signs of growth
As Verizon Business is starting to build their comeback story, they are not alone. Other companies are competing in this sector as well. Some are direct competitors, while others resell Verizon services.
Verizon both competes with and works with companies like Betacom, who is a competitor in this sector and see’s the same growth opportunity. They are a 30-year-old company helping the business sector implement new solutions like private 5G networks, among other areas.
Compared to the companies which they both compete with and work with, Verizon has size, but often times smaller competitors can be more agile.
Each Verizon sector is separate and at different places in their recovery. Some are further ahead than others, but they are all a work-in-progress.
Verizon went off-track, but now trying to re-boot next growth wave
While Verizon is still a powerhouse in the communications space, they went off-track years ago and have been struggling for meaningful recovery, innovation and long-term growth ever since.
Under CEO Ivan Seidenberg, Verizon was at its best with the iPhone and Android launch and the early explosion of the wireless data network and apps.
Next, under CEO Lowell McAdam, Verizon struggled to keep fueling that growth wave. The iPhone, Android and wireless data areas had cooled off. So, Verizon and their competitors needed to find new ways to grow the company as the growth wave they were riding, lessened.
Verizon and AT&T spent years spinning their wheels
If you recall, to find new growth Verizon and AT&T both took some crazy new directions.
Verizon acquired AOL and Yahoo. It did not work. AT&T acquired WarnerMedia which included CNN, Warner Brothers and more. That did not work either.
These were massive and impressive moves, but they were in the wrong direction. They simply became an expensive distraction and as it turned out.
The problem was both Verizon and AT&T spent years spinning their wheels and getting nowhere. They were once industry leaders, who now found themselves floating in place.
At the same time, T-Mobile was struggling. They spent time trying to right their ship and re-boot their wireless business. This back-to-basics approach worked. Today, T-Mobile is stronger than ever.
When Vestberg became CEO, his job was to turn the ship around and once again build Verizon into a strong, growth company.
Executive leadership team tasked with turning Verizon around
Verizon leadership also includes Manon Brouillette, Executive Vice President and CEO of Verizon Consumer Group. Sowmyanarayan Sampath, Executive Vice President and CEO of Verizon Business. James J. Gerace, Chief Communications Officer. Diego Scotti, Executive Vice President and Chief Marketing Officer and others.
Verizon says they are the world’s largest wireless, fiber-optic and global information network and service company. That sounds impressive.
However, that does not mean they are growing today. And to maintain that market position, they need to throw fuel into the growth fire to keep it burning hot.
That is something they have not done well over the past decade.
Industry analyst learned from customers, investors about Verizon
Over the last several decades as an Industry Analyst, I have talked with countless executives of companies, consumers, competitors and investors all over the United States.
What I have learned is a bit of a mixed bag.
The good news is Verizon still has a strong reputation, especially among traditional communications competitors. The bad news is that is not guaranteed for success moving forward as the industry continues to morph.
The Verizon challenge is to restart their growth wave with innovation and dominance. While they are a powerful company, there are also many new companies and technologies they are competing with like Xfinity Mobile, Spectrum Mobile, Altice or Optimum, Betacom, and many others, large and small.
That is a threat and an opportunity for Verizon. It depends how well they perform going forward.
This is what Verizon must focus on now. They say they are, and that progress is being made. I hope they are right.
The problem is, there are few if any real signs of progress yet. And this continued loss of market share is not a positive sign.
Verizon at critical moment in their history for customers, investors
Verizon needs to show strong and ongoing growth going forward, so they can keep a leadership position in the minds of the marketplace among customers and investors.
I believe they are at a critical moment in their history. The challenge is to restart their growth engines and to get back to the strong growth and leadership trajectory they had a decade ago.
It has been done before. If you recall, in recent years T-Mobile moved from zero to hero as they rebuilt their crumbling empire. So, this kind of recovery can be accomplished. It takes vision and time.
Verizon seen as a fast follower, not innovative leader
That means it all depends on the attitude of the executives, their performance and the forward-looking marketing direction and strategy of the company.
Verizon needs to rebuild its image in the marketplace for the market to get behind them once again.
They need to be perceived as a mover and a shaker. They need to be seen as a leader, not a follower in this changing and expanding industry.
I believe Hans Vestberg understands the importance of rebuilding the company and its brand in the minds of the marketplace and investor community.
I also believe he has translated that urgent mission to company leadership. The only question is, can they fix what is broken and get back on track for growth?
There is a saying, never try to catch a falling knife.
With Verizon, the knife has been falling for so long, they have no choice but to try and catch it and then start to rebuild the brand and pave new paths to success in this new marketplace.
Mixed messages from Verizon on comeback and growth
So, Verizon has this two-part mission… stop the losses and start the building.
According to Vestberg, when speaking at the recent Goldman Sachs Communacopia and Technology Conference 2022, while Verizon is in the middle of a comeback, wireless postpaid net adds will continue to decline. Churn is also increasing, which they blame on price increases.
This is a mixed message. Customers, workers and investors want proof. They want evidence of a Verizon turnaround. Especially after years of effort.
What they do notice is both Verizon and AT&T have raised their prices, while T-Mobile has not.
This is not helping Verizon with recovery.
I believe, for years to come, as the economy continues to struggle, many users will be looking for ways to cut costs.
Verizon showing market share loss while T-Mobile showing gains
So, the Verizon recovery story is still a work-in-progress.
Things look like they are focusing on the right areas. I just wish there was better news to share. Perhaps their will be going forward. I hope so. I want to be able to talk about their success and comeback.
The ball is now in their court, as it has been. The only question is, can they and if so, when will signs of the recovery begin?
Let’s hope Verizon can turn the ship around and remain a leader in the wireless and communications industry. The ball is in their court.