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. It 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 2018, Verizon had 118m retail wireless connections, all but around 4.6m on post-paid contract. The company had just under 7.0m broadband connections, and still served 11.7m fixed line voice lines, mostly in key urban markets. Most rural connections have been sold on to Frontier or other suppliers. Total revenues for 2018 were $130.9bn of which more than 70% was generated by wireless. Oath contributed $7.7bn and FiOS just under $12bn. Group net income fell by half in 2018 to $16.0bn, partly as a result of a large write-off against the struggling online media division. The previous year had also included a large one-off gain from tax cuts.
Capsule checked 30th January 2019
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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 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.
Adbrands Weekly Update 8th Nov 2018: Verizon's new CEO Hans Vestberg unveiled a corporate restructuring that will, among other changes, involve the elimination of the unloved Oath digital media brand. Under the new structure, Verizon's fixed line and mobile operations are being merged and then resplit according to customer type. Former Verizon Wireless CEO Ronan Dunne now becomes head of the new Verizon Consumer Group, while Tami Erwin will head up Verizon Business Group. Oath and its multiple sub-brands including Yahoo, AOL and HuffPost become units of Verizon Media Group under Guru Gowrappan. Infrastructure is the domain of a new Global Network & Technology division under CTO Kyle Malady.
Adbrands Weekly Update 20th Sep 2018: Tim Armstrong, CEO of Verizon's online division Oath, will depart the company at the end of the year, and will be replaced by Guru Gowrappan, currently president & COO. Armstrong joined Verizon in 2015 following its acquisition of AOL, which he had led for the previous six years. Following the purchase of Yahoo two years later, Armstrong oversaw the consolidation of those two businesses to create Oath. Earlier this year, he was rumoured to be under consideration as a potential successor to Sir Martin Sorrell at WPP, though he denied any interest in that role.
Adbrands Weekly Update 14th Jun 2018: Verizon CEO Lowell McAdam will surrender that role in August, though he will remain executive chairman until the end of the year, and then become non-executive chairman. His successor will be Hans Vestberg, a former CEO of Swedish tech group Ericsson, who joined Verizon a year ago as chief technology officer. John Stratton, Verizon's president of global operations, who was also under consideration to become CEO, announced plans to leave the group later this year. McAdam told the WSJ that Vestberg is "a better match for where Verizon was going to go. With 5G in front of us, we are at a huge inflection point. Whoever is at the head of the business should be able to see that through."
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