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For Verizon Business, the 5G Opportunity is Looking Like a Winner: Jeff Kagan

Columnist, Key Opinion Leader, Influencer

Jeff Kagan is an Equities.com columnist. As an Industry Analyst over 30 years, Kagan follows wireless, wire line, telecom, Internet, pay-TV, cable TV, IPTV, Cloud, IoT, AI, Mobile Pay, Smart Cities, Smart Homes, Automotive, Self-Driving Cars, Healthcare, Digital Health and more. He is a well known KOL and Influencer.
Jeff Kagan is an Equities.com columnist. As an Industry Analyst over 30 years, Kagan follows wireless, wire line, telecom, Internet, pay-TV, cable TV, IPTV, Cloud, IoT, AI, Mobile Pay, Smart Cities, Smart Homes, Automotive, Self-Driving Cars, Healthcare, Digital Health and more. He is a well known KOL and Influencer.
Verizon's Sampath: “We think there are three big trends... and we have a strong play in all three."

For businesses around the world, the transformative power of technologies like 5G, wireless, broadband and cloud is well-established. And the new CEO of Verizon Business, Sowmyanarayan Sampath, has every intention of riding the wave as enterprises leverage these capabilities to advance their digital strategies.

Based on what I see so far, the company’s new direction is impressive. Verizon is getting back to its core and — for the first time in years — I like their growth potential. Now the question is, can the company deliver?

Speaking at the Oppenheimer 25th Annual Technology, Internet and Communications Conference this month, Sampath laid out the company’s game plan, a new direction that he expects to play a significant role in its growth moving forward.

Verizon ( Verizon Communications Inc - $0. 1.11 (0.02907%)  ) is not alone in recognizing the opportunity in business communications services. Its competitors — including AT&T ( AT&T, Inc. - $0. 0.27 (0.0142%)  ) Business, T-Mobile ( T-Mobile US Inc - $0. 1.79 (0.01174%)  ) Business, Comcast ( Comcast Corp - Class A - $0. 0.71 (0.0198%)  ) Business, Spectrum ( Charter Communications Inc. - Class A - $0. 4.90 (0.01248%)  ) and Altice ( Altice USA Inc - Class A - $0. 0.27 (0.06308%)  ) / Optimum — all stand on the same threshold. 

While acknowledging the intensely competitive environment, Sampath believes the company is well positioned. “Where we see massive growth is on the wireless side of our business  — and 5G is the backbone of that.” He cited the company’s 45% market share in mobility wireless as a starting point.

“We think there are three big trends that we play into, mobility, broadband and cloud,” he said. “We have a strong play in all three of them. And when you put that in the foundation of a network like ours, we think there’s a huge opportunity to grow in front of us. Our vectors of growth or our pathways to growth, we think there’s almost a $90 billion opportunity in [total addressable market] for us to grow into.”

Moving Past Confusion

If we pull the camera back and take the long-term perspective, we see that Verizon’s expansion from telephone company into wireless, broadband and more was not entirely smooth. Searching for new growth, the company went down a rabbit hole with AOL and Yahoo. And its expansion into 5G, as that technology emerged, was not as fast as industry watchers, investors and workers had hoped.

5G has two parts, one is mobility and the other is for home or business-based services. The difference is important. When we think of 5G, most think of the wireless service we use with our smartphones and tablets while out and about. However, 5G also powers home and business-based communications services. This let Verizon claim it was a strong player in 5G, and while that was true on the home and business side, it took longer on the wireless side. As a result, it was confusing for customers — and especially investors — to fully understand its position in the marketplace.

Today that problem has been put to rest. The company shows growth on both fronts. Going forward, Verizon Business has a real growth opportunity: Not only do consumers want to upgrade, but their business customers do too. Large or small, the business community has started the process of reinvention and expansion and sees the kind of services provided by Verizon Business as key to their critical transformation.

This is all great news for investors, customers and for Verizon as a whole. And we are still in the very early innings of this next growth wave. The challenge is all the competitors Verizon must continue to battle. True, they are an industry leader, but the industry continues to change, and as it converges with other industries, the competitive threat will ramify. That said, I believe Verizon prefers this kind of playing field compared to the one they had been playing on in recent years. Let the wireless games begin!

Jeff Kagan, a telecom, technology and wireless industry analyst and consultant, is columnist for Equities. He covers 5G, AI, IoT, the metaverse, autonomous driving, healthcare, telehealth, pay TV and more. Follow him at JeffKagan.com, and on Twitter @jeffkagan and LinkedIn.