Verizon Communications is one of the two leading national US telecoms businesses (alongside arch-rival AT&T). It was formed in 2000 from the merger of Bell Atlantic and GTE Corporation, and has strengthened its position further with other acquisitions including long-distance operator MCI in 2006 and regional mobile service at Alltel at the beginning of 2009. The group offers a full range of communications services. However its most significant business is Verizon Wireless, for many years a joint venture with UK mobile giant Vodafone. After five years as America's #1 mobile service by subscribers, Verizon's lead in this fast-consolidating sector was overturned in 2008 by the new AT&T. As a result, in 2013, in one of the largest deals to-date in corporate history, Verizon agreed to buy out Vodafone's 45% stake in Verizon Wireless for a whopping $130bn in cash and shares. The group has also pushed aggressively into the broadcast market with a huge investment in fibre-optic technology, which provides the platform for its FiOS ultra-highspeed broadband and TV service, though so far this is only available in nine states. Verizon claims the largest 4G high-speed wireless coverage in the US, and is a leader in the national roll-out of 5G. Matching AT&T's push into satellite TV with a corresponding move into online content, the group acquired one-time internet pioneer AOL in 2015 for $4bn, followed by Yahoo in 2016 for $4.8bn. Those units were merged under the name Oath, but that bet - a risky one - has not gone as smoothly as Verizon had hoped. The group scaled back expectations for this unit during 2018, and dropped the Oath brand in early 2019. Hans Vestberg, former head of Swedish tech group Ericsson, succeeded Lowell McAdam as CEO of Verizon in 2018. At the end of 2019, Verizon had 120m retail wireless connections, all but around 4m on post-paid contract. The company had 7m broadband connections, 4m Fios customers, and still served 10.7m fixed line voice lines, mostly in key urban markets. Most rural connections have been sold on to Frontier or other suppliers. Total revenues for 2019 were $131.9bn of which more than 70% was generated by wireless. Verizon Media contributed just $7.5bn and FiOS $11.3bn. Group net income was $19.3bn.
Capsule checked 15th September 2020
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Who competes with Verizon? Verizon competes in the national wireless segment against three other national suppliers - AT&T, T-Mobile and Sprint - as well as a dwindling collection of regional suppliers. Competitors in internet services include cable companies Comcast, Charter Communications and Cox. Verizon's main competition in regional local communications comes from alternative suppliers, such as cable companies or internet companies offering IP telephony. See Telecoms Index for other companies
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Historical profile information for Verizon
Adbrands Daily Update 20th Nov 2020: Verizon continues to seek ways of resurrecting its struggling online media division, centred around fading dinosaurs AOL and Yahoo. Its latest move is to forge an alliance with rival BuzzFeed, cemented by the transfer to BuzzFeed of HuffPost, which came to Verizon as part of AOL. Terms of the all-stock deal were not disclosed, but will reportedly give Verizon a stake in BuzzFeed. In addition, the new partners have agreed to syndicate content on each other's platforms and will explore joint advertising opportunities.
Adbrands Daily Update 15th Sep 2020: Further consolidation in the US wireless market looks likely in the wake of T-Mobile's takeover of Sprint. Verizon this week agreed terms for the acquisition of prepaid specialist TracFone from Mexican telecoms giant America Movil. The smaller company serves around 21m customers under a variety of banners, including StraightTalk, Net10, SafeLink and Simple Mobile. Verizon is the biggest mobile operator overall in the US, but currently has only a small exposure to the less lucrative prepaid market. The TracFone purchase will push it into the lead in that sector with 25m customers, ahead of T-Mobile. The price tag is around $6.9bn. The deal would also mark America Movil's exit from the US market.
Adbrands Daily Update 29th Oct 2019: Talks with local regulators in different states to resolve opposition to its merger with Sprint drag on, but in all other respects T-Mobile USA is thriving. In 3Q it added more postpaid wireless subscribers than both its two biggest rivals combined. Postpaid are generally considered to be mobile companies' most valuable customers. Net adds were 754,000 subscribers, compared to 444,000 at Verizon and a lacklustre 101,000 at AT&T. Total customers at T-Mobile at the end of Sept were 84.2m, though prepaid still represented a significant proportion. Total postpaids were 45.7m. AT&T had 162.3m, including 75.2m postpaids. However its results were overshadowed by a worrying decline in pay-TV and broadband customers. Verizon had 93.8m mobile customers, and remains the postpaid champion with 89.1m contract subscribers. Sprint has yet to report 3Q figures, but at the end of 2Q had 54.6m total customers of whom 32.2m were postpaid. If the T-Mobile/Sprint goes through without further significant losses in postpaid customers, the combined total of around 77.9m monthly subscribers would put that business ahead of AT&T.
Adbrands Daily Update 13th Aug 2019: Verizon continued to unpick its lavish and likely ill-judged move into internet content with the disposal of social media pioneer Tumblr for a nominal sum. Yahoo acquired that business in 2013 for $1.1bn. Verizon offloaded it and its 200 staff to Automattic, owner of Wordpress, for a figure rumoured to be less than $3m.
Adbrands Daily Update 12th Dec 2018: Verizon's gamble on digital media hasn't gone according to plan. The group said it will write off another $4.5bn in the current quarter against acquired businesses AOL and Yahoo and their various subsidiary brands. On top of previous write-offs, that move will reduce the goodwill attached to those two deals - which had a combined value of $9bn - to just $200m. The main culprit is the continuing squeeze on digital advertising. Along with every other online company except Google, Facebook and Amazon, Verizon's digital division Oath is struggling to sell space. Its share of the digital ad market is expected to fall by almost a quarter year-on-year to to 3.3%. "These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business," said the company. The Oath brand will be dropped in Jan 2019 in favour of Verizon Media Group.
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