Verizon Restructuring Puts Emphasis on 5G

Verizon Communications is divvying its wireless business into new units in the name of 5G.

The telecommunications company is restructuring its operating units into consumer, business and media.

Recently appointed CEO Hans Vestberg said Monday that Verizon’s push to lead the 5G market impacted the reorganization, which will take effect Jan. 1, 2019.

Verizon’s Hans Vestberg

“This new structure reflects a clear strategy that starts with Verizon customers,” said Vestberg. “We’re building on our network-transformation efforts and the Intelligent Edge architecture to deliver new customer experiences and optimize the growth opportunities we see as leaders in the 5G era. We’re focused on how our technology can benefit customers’ lives and society at large.”

Wireless has stood alone as a unit, but it will soon be a component of both Verizon Consumer and Verizon Business. The consumer group will contain wireless and wireline services for consumers as one might expect, and it will also include wireless wholesale.

Wireline wholesale will be under the Verizon Business umbrella, which targets small, medium, and enterprise businesses and governments. The unit will also contain the Verizon Connect telematics business. Current Verizon Wireless President Ronan Dunne will lead Verizon Business in 2019.

Verizon has also rebranded its Oath media and advertising unit into Verizon Media Group/Oath as its third “customer-facing area.” Verizon’s Global Network and Technology organization, which Vestberg previously led when he was chief technology officer, will support the three groups.

Verizon Wireless revenue grew 6.5 percent year over year, to $23 billion, according to the company’s third quarter financial report. The company’s overall profit increased from $3.7 billion to $5 billion.

Ian Morris of our sister site Light Reading notes that it’s “perhaps not surprising” to see wireless and wireline join forces in two of the new Verizon operating units.

“The arrival of 5G is blurring the lines between fixed and mobile communications for both technology and service reasons, ” he wrote. “On the technology side, mobile operators launching 5G will need access to high-speed fixed lines for ‘backhaul’ connections between base stations and the core network.”

Sarah Krouse of the Wall Street Journal writes that the New York City-headquartered company has diverged from some of its competitors in a movement targeting the 5G opportunity.

“While Verizon’s rivals have pursued large deals to transform their businesses in recent years, the largest U.S. wireless carrier by subscribers has opted instead to focus primarily on building a faster network,” she said. “Large U.S. carriers haven’t yet articulated how they will charge customers for 5G service in the coming years, but some analysts say the faster service could be an opportunity to generate new revenue.”

Morris writes that carriers must package residential 5G more like they would for fiber than for mobility.

“In some markets, operators are also combining fixed and mobile operations as they concentrate on selling bundles of communications products, as opposed to standalone services. Verizon’s restructuring could support a similar focus on ‘convergence’ in the future,” he said.

Krouse reports Vestberg as saying that Verizon buying Vodafone in 2014 “helped pave the way for the changes.” Vodafone at the time owned a 45 percent stake in Verizon Wireless.

Verizon Partner Program personnel have not responded to inquiries about Monday’s restructuring news, so there’s no end of unconfirmed speculation about the high-level changes will impact the channel. But there’s one little tidbit to keep in mind: Verizon has been moving closer to giving select master agents access to …  … its wireless portfolio.

Scott Peterson, general manager and vice president at Verizon Business Markets, told Channel Partners earlier this year that the company is “on the cusp” of making wireless available.

“That’s something that has been sacrosanct. We haven’t done that in the past. There’s a lot of pent-up customer and partner demand there, so people are excited and really bullish on what we’re doing right now,” Peterson said.

The partner program went through no small change when Verizon launched its Business Markets unit in 2017. But the program has realigned and simplified.