Verizon: Analysis of the Wireless Business

2408 WordsJan 14, 201810 Pages
Verizon is a major telecommunication provider in the United States. The company is the market leader, with $110 billion revenue and $2.4 billion in profit (MSN Moneycentral, 2012). Verizon has steady revenue streams that are largely based on a subscription model. It has several business segments, including wireless (63.3% of revenues) and wireline (36.7%) (2011 Verizon Annual Report). Most of this report will therefore focus on the wireless business, not only because this is the largest business that the company operates but because it is a rapidly growing and evolving business as well, a function of the rapid pace of smartphone adoption in America. The two segments of the general environment that rank highest in their influence on Verizon are technological environment and the social environment. Though the telecommunications industry is heavily regulated, government has an interest in maintaining if not strengthening infrastructure, so tends to not be a major burden. Additionally, regulations apply to all players in the industry, so do not affect Verizon to a degree higher or lower than competitors. The economic environment does affect earnings potential, but for more consumers telecommunications services are not a discretionary purchase, to fluctuations are not strong. Verizon's beta of 0.51 reflects the stability of its revenue streams against the business cycle. The legal environment is complex, but does not have nearly the same effect on Verizon as the other aspects.

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