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
Verizon has gone through many changes in the last few years. The communication industry is extremely competitive and this company would not have had a chance of forming at all, except for the government ordered breakup of AT&T in 1984. Their targeted areas of communication are cellular, paging and PCS services for corporate and individual customers. They have been trying to expand their business for corporate local goods and services.
In business, market structure plays an important role, which helps to shape the competitive landscape for businesses at all levels. Each business industry will naturally form a market structure that comes in numerous forms: Perfect competition, monopolistic competition, oligopoly, or monopoly. Verizon Wireless is a well-known communications company and large enough to affect the market. Oligopoly is defined as a market in which only a few firms dominate, and judging from Verizon competition there are only a few firms involve: T-Mobile, AT&T and Sprint. With only few competitors involve the barrier to entry is high, but there still lies a large pool of customers. The barriers are high because of the amount of money that has to into the infrastructure
The generation of talking face-to-face is slowly fading away, and the technology era is going to keep on growing. One of the most widely used technology services known today is the cellular phone industry. According to the Pew Research Center’s website, 90% of American adults own a cell phone. Of that 90%, the smartphone ownership is at 64% (2013). Verizon Wireless, along with the other major carriers, T-Mobile, Sprint, and AT&T, have taken this data and comprised a growing industry where competition arises from all angles. These companies have battled one another on pricing, plans, and customer service for many years in order to stay on top. Unfortunately, these are major factors in whether or not a customer will choose the particular company over another.
The future of the telecommunication industry is an exciting future. No longer can these companies depend on telephone service plans to maintain profit. Each company needs to find other avenues, packages and services that can be sold to existing customers while attracting new customers. The companies
Verizon’s business is most heavily influenced by the advancements in technology, but other industry changes and government decision making are other social issues changing Verizon. As previously discussed in the essay, Net Neutrality is a bill that projects the future of the telecommunications industry. In the case that it is protected it will prevent a monopoly of the internet which will benefit more than just consumers, but for Verizon the abolishment of the bill will mean opportunity to increase profits through selling the internet since it will no longer be a free utility (Maisto, 2014). Thus, the industries future profits lye on the decision of Net Neutrality.
Through expansion, technological improvements and more investment leading to continuous network and product upgrade, should lead Verizon to better compete in international services. With emerging competition from countries like China, it is a matter of survival to act or not.
Verizon Wireless officially entered into the communications market on April 4, 2000. A joint project of Verizon Communications and Vodafone, Verizon Wireless is the self-proclaimed leading supplier of wireless communication in the United States, offering service in more places across the country than any other service provider. While Verizon Wireless did not begin corporate operations until 2000, its history can be traced back many years. The company’s roots can be traced to two distinct companies: Bell System and General Telephone & Electronics Corp. (GTE). Verizon Communications was formed on July 27, 1998, from a merger of
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.
Verizon Communication (NYSE:VZ) stock price tumbled significantly in last two months, due to lower than expected results for the final quarter of 2016 and a soft outlook for this year. In addition, several recent downgrades from analysts also added to the downside of Verizon’s stock price. In the final quarter of 2016, its adjusted earnings per share of $0.86 were standing below analysts’ expectations of $0.87-$0.93.
Rogers Cable is the leader in Canada’s cable television market, with a over 2.3 million cable television subscribers and 500000 internet subscribers. In 1993 the Canadian government relaxed the norms of telecommunications industry followed by an application in 1999, allowing local carriers to change the content of the information passing through their networks. This led to increased competition in the market and the customers enjoyed a lot of choice. As such Rogers Cable focused completely on increasing its subscriber base and
Due to wide coverage and most efficient customer service Verizon has become the largest Wireless communication company in U.S.
In its 2012 annual report the company states “innovation in networks is the foundation for growth across the whole industry.” Therefore, Verizon has not only developed strong partnerships aimed at enhancing services; the company has also expanded into the digital healthcare industry, reduced reliance on energy usage, and will continue to expand vertically to other industries where their technologies can influence social change.
I. BACKGROUND: CelluComm and GMCT and the Industry AT&T’s Bell Laboratories cellular telephone networking innovation had enabled several cellular network operators to get licenses from the FCC to operate in separate license territories right about the same time AT&T was broken up in early 1980s. These operators were either companies like Cellular Communication Services, Inc. (CelluComm) or small entrepreneurs who had won license territories through the lottery system. CelluComm’s president and founder Ric Jenkins was known for being an aggressive businessman who had extended it to a 200 million dollar enterprise ranking in the top 20 of the industry. Key to
Verizon Communications formed by the merger of two big and successful companies, Atlantic Corp. and GTE Corp., is the largest telecommunication company. The company serves large part of the market in United States. However the company faces certain strengths and weaknesses which affect the way company formulate its strategies.
The Verizon Communication Company deals with the sale of products like mobile and fixed telephone and offers broadband wireless internet services in America. It was founded in 1984 as Bell Atlantic and later changed the name to Verizon Company after merging with GTE in 2000 (Sbeit, 2008).