In tracking a company against its competitors in a changing industry, it’s important to know what the growth plans are going forward. However, during the last few years, both Verizon (VZ) and Verizon Wireless growth plans have been difficult to understand. Let’s explore this topic, which has many in this industry scratching our heads with concern for Verizon.
This was not as important in the past, since the industry was in the middle of a smartphone growth wave, but looking forward as the industry and competitors are changing, it’s curious how AT&T (T) and AT&T Mobility, Sprint (S) and T-Mobile (TMUS) have done a great job highlighting their growth plans. And how Verizon has not yet clearly spelled out a significant growth plan.
On the wireless side, today three of the top four wireless carriers, AT&T Mobility, Sprint and T-Mobile are doing a good job spelling out their growth plans, so we can follow and track their progress. What about Verizon Wireless?
On the wire line side, AT&T is doing a great job explaining their growth plans. CenturyLink (CTL) does not seem to be as aggressive, but they are not considered one of the tier one players either. What about Verizon? Verizon was a growth oriented company, but in the last few years they seem more like a high-powered locomotive that has slipped off the growth track.
This is starting to be a concern, as investors, workers and customers ask me questions I simply can’t answer because Verizon does not seem to be as open as they once were and as their competitors still are. When the industry is transforming itself, as wireless and wire line now are, it’s vital for every competitor to spell things out. Yet Verizon is quiet. Maybe too quiet for their own good...
Is the Verizon Growth Wave Slowing?
Every company and every industry goes through changing growth waves. The growth wave always grows, then crests, then falls. Companies must have the next growth wave in place for them to continue showing growth. Some companies do this well...some don’t. If they don’t, even very large and strong companies begin to slide, which, due to momentum, is difficult to turn around.
When a company fills in the blanks, it leaves a clear path for every interested party. When a company does not, it creates uncertainty in a world that demands more certainty. That level of uncertainty is never helpful to the company. In this type of world, where the company does not direct your attention to their areas of growth, your attention looks for answers, and those are never as positive.
Compare Verizon to AT&T, Sprint, T-Mobile and CenturyLink
As we look at AT&T and AT&T Mobility, we see their growth plans have expanded to include GigaPower ultra high speed Internet, wireless TV, DirecTV, Uverse, wireless in Mexico and so much more. With these offerings, they are expanding within their region and nationally. These are very strong, top level growth ideas, which if successful, will lead to strong growth for the company going forward.
During their analyst meeting a few months ago, AT&T did a very impressive job of spelling out their past, present and future strategies. This made analysts much more knowledgeable about the company and it’s plans going forward. In fact, AT&T regularly does this same thing countless times at countless different meetings. They are very open.
Sprint and T-Mobile are both on the wireless side of the game. They too have been very open about their growth plans going forward. Sprint regularly talks about their growth, transformation and nationwide improvement in service quality in market-after-market. T-Mobile talks about their growth and new ideas like Binge On wireless TV service.
CenturyLink is the number three baby bell, and they seem to be holding their own, however not showing much in the way of innovation leadership or change.
Where is Verizon?
There is quite a bit of excitement about the wireless and wire line industry going forward. However, with all that noise, where is Verizon and Verizon Wireless? They used to be a growth-oriented company. They used to talk growth and show growth. They were much more clear about their ongoing plans several years ago, when the company was run by CEO Ivan Seidenberg and head PR and corporate communications VP Peter Thonis. Like Babe Ruth, they always seemed to point to the fence and swing so we could track their progress.
In fact, today AT&T, Sprint and T-Mobile are all the Babe Ruth of todays marketplace. Verizon however seems to be a much quieter company. Today, Verizon is looking more like CenturyLink.
Maybe there is nothing to be concerned about. I hope not. I have followed CEO Lowell McAdam and Chief Communications Officer James Gerace for quite a long time. They are both good, honest men. They do not seem to be concerned in public. I hope they are right. I hope they have a growth strategy. I just wish they would share it with the marketplace like AT&T, Sprint and T-Mobile do.
Unanswered Questions of Investors, Customers and Workers
Nagging questions being generated by the quieter Verizon and Verizon Wireless are really starting to weigh on investors, workers and customers.
So what do we hear about Verizon and Verizon Wireless? They seem to have slowed their FiOS IPTV expansion. They have recently introduced Go90, which is a wireless video offering. While this is helpful, it seems like a lower level offering. It does not seem like a real growth opportunity for a company the size of Verizon. Their acquisitions of WorldCom, AOL and now possibly Yahoo (YHOO) also may be helpful, but they never really turn into real growth opportunities.
Perhaps the most exciting development at Verizon is that Comcast (CMCSA) is working with them to develop a competitive offering. I see this helping Comcast to combat AT&T DirecTV, Uverse, Gigapower and wireless TV. However, this is not a Verizon offering.
So moving forward, where is Verizon change, innovation and growth going to come from? With all that said, the growth opportunities seem second level at best. So what are the real growth strategies for Verizon and Verizon Wireless going forward?
Yesterday, we knew growth was all about the Apple (AAPL) iPhone, Android and other smartphones. However, going forward, we are much less clear about Verizon growth plans and strategies.
Bottom line, we see AT&T, Sprint and T-Mobile being aggressive with their growth plans. CenturyLink is much more quiet, but they have always been that way. At the same time, we see Verizon staying in the shallow waters. This is not what I expect from Verizon.
Perhaps they have plans they are not yet sharing with us in the marketplace. Perhaps they will continue to see growth as the industry shifts. Perhaps, perhaps, perhaps. That’s not helpful to investors, customers and workers who are looking for clarity.
The problem is, we simply don’t yet know. I would like to warn Verizon that their current path will not be helpful going forward. They must be open and honest and have aggressive and real growth-oriented plans.
As the industry evolves, Verizon must evolve along with their competitors. If not, their growth wave may crest and then fall. That’s what happened with countless other past leaders like Motorola (MSI), Blackberry (BBRY) and Nokia (NOK). And that’s the last thing their investors, workers and customers want.
Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him atjeff@jeffKAGAN.com.
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