Everyone knows Verizon and Verizon Wireless. They are an industry leader. Their stock is one of the strongest in the industry. However, according to users, the last several years have had little visionary excitement, reinvention and innovation. New CEO Hans Vestberg has a challenge to keep the stock performance up and to generate excitement in the marketplace at the same time.
It appears he understands this challenge and wants to do just that. Vestberg is starting an organizational re-design, which if successful, will be good news for the company, workers, customers and investors. Let’s take a closer look at how Verizon is transforming going forward.
Wireless analyst following Verizon is expecting changes
As a telecom and wireless analyst, I have closely followed all competitors in the space, including Verizon and Verizon Wireless for decades. In fact, I have been following them even before they were called Verizon.
If you recall, the company started business in the year 2000 when Bell Atlantic and GTE merged. They continued to grow over the last two decades though mergers, acquisitions and organic growth.
They have had their ups and downs, wins and losses, successes and challenges over the years as the industry transformed, time and time again. The results of each left the competitors further ahead than they were before.
The exciting news is, the same thing is happening right now. However, this time, the competitors seem to be taking different paths.
Over time, as an industry analyst I have had conversations with Verizon CEO’s, senior executives and given speeches to their management teams and workers. When asked, I shared my take on the changing industry, new opportunities, their strengths, weaknesses and growth opportunities, as I do with other industry competitors.
Year after year, through all their ups and downs, Verizon was always a strong performer. Then over the last many years, things changed. They went quiet. They focused on their stock price, not on marketing. And to be very successful for the long-term today, companies need to focus on both.
They were still a performer for their stockholders, but they should also have been an industry visionary in the changing and noisy wireless marketplace. In this respect, this new quiet position was not helpful to the company.
Is sleeping giant Verizon waking up under Vestberg?
Now under new CEO Hans Vestberg, the hope is the company once again can burst onto the scene and perform both in the stock market and in the marketing and innovation side as well.
So, the question is simple. Will Verizon once again join the group of industry visionaries and leaders in the transforming and rapidly expanding wireless industry?
In recent years we have not seen or heard much news from the sleeping giant. However, while I am not sure yet, I am starting to get the impression that could be about to change.
We are hearing about shakeups in Verizon executive ranks and redesigning the company to better position it for growth in the marketplace of tomorrow.
That may be the early signs of good news for Verizon. I hope so. Leadership means more than just a strong stock price. True industry leadership helps steer the industry to its next destination.
Hans Vestberg strategy says Verizon 2.0 creates network-as-a-service
Hans Vestberg calls this next step, Verizon 2.0 which just began in April. It has two distinct areas, business and consumer. This replaces the older areas of wireless and wireline. The reason for this change of focus is to streamline the wireless and wireline networks so they can serve their customers with their next generation 5G wireless network.
In a recent analyst meeting, Vestberg says the company is turning into a network-as-a-service or NAAS. Sounds interesting. But what does that mean exactly?
Thinking about it from this perspective, this sounds like what some top competitors are already doing. So, it could also be successful for Verizon if they do it right.
The real question is this. What do all these changes mean for company growth and industry leadership going forward?
They have always been a strong wireless and telecom provider. However, there are two buckets, stock and industry visionary. And they completely lost touch with the other bucket in the last several years.
What will Verizon look like in five or ten years? Today especially, in the noisy business environment, every company needs to be a strong performer in the stock market, but they also need to be a visionary leader for their transforming industry.
With or without Verizon, the wireless industry is transforming
With or without Verizon, the industries of wireless, telecom, pay TV, Internet and more are rapidly transforming. That’s why they need to not only be a part of the changing industry, but they also need to be a leader in it.
They have plenty of competition from the same companies they have been battling with for years, and for new competitors who are entering their space and leading the charge into this new world.
So, it’s past time that Verizon re-engage in the changing industry. Entering now is late, but they can still be successful going forward if they do things right.
Can they successfully do this? Can they join competitors who are on the cutting edge, paving the new path to tomorrow?
I hope the changes they have been making recently under the new CEO will put them once again among the leaders and visionaries they compete with.
I want nothing more than to tell you about what Verizon is doing in all these industry sectors. About what their new strategy is going forward. Now we wait and see what the companies next step will be. Here’s hoping for the best.
Disclosure: Jeff Kagan, like many researchers and analysts, provides or has provides research, provides or has provided research, analysis, advising, and consulting services to many companies, including AT&T, Sprint, Xfinity Mobile, IBM, PayPal and many others. For more information, as well as a detailed list of clients, visit www.jeffkagan.com. He does not hold equity positions with companies named in this column.
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