Verizon Sold Off Its Wireline Telephone and Internet Operations

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Bus 588 Current event report Michael Liu Last week, Verizon Communications Inc sold off about a quarter of its wireline telephone and Internet operations (WSJ). The company sold its assets to Frontier Communication Corp, a regional telephone company, for $10.5 billion, and the deal leaded Verizon to exit the wireline phone service market in Texas, California and Florida. Also, in order to withdraw from the local wireline phone service market completely, Verizon left millions of FiOS customers who the company spent around $23 billion and 10 years to develop. These customers are roughly 1.6 million fewer FiOS internet subscribers who are about 24% of the company’s total, and around 1.2 million fewer FiOS video customers who are about…show more content…
But, after the deal, Verizon narrows its other types of business and expand its wireless business over the next few years. So, the company will have a low levels of diversification in the future, and the corporate-level strategy will become to the dominant business diversification strategy. The undersell action of Verizon will let the company focus its pivot of business on wireless market, enhance its core competence and create more profits in the future. The second reason is because businesses of wireless have less regulation than wireline phone business. New rules proposed by the Federal Communications Commission and backed by President Obama to regulate Internet lines as a utility contributed to the company’s decision to sell (WSJ). These new rules, as we known related to Net Neutrality, will let internet become free and open. All users will have same internet service, such as high connection speed and no contents limitation, and network carriers can’t provide different wireline service based on different monthly service fee. So, these new regulations will limit Verizon’s wireline business and decrease the company’s revenue potentially. As Verizon Chief Executive Lowell McAdam said, “an important consideration was the current regulatory uncertainty and the potential impacts on future investments of a reclassification of

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