Editor’s Corner—This isn’t your father’s Verizon

From left to right, some of the new faces at Verizon include Matthew Ellis, Hans Vestberg, Rima Qureshi, Ronan Dunne, George Fischer and Diego Scotti.

As Verizon works to expand into new technologies (5G) and industries (advertising), the company is also looking a lot different. The upper echelon of Verizon’s management now includes a noteworthy collection of fresh faces, particularly those with international experience.

This may be an attempt by Verizon CEO Lowell McAdam and Verizon’s board to inject some fresh blood into a company that has historically promoted almost exclusively from within.

“The previous regime was successful,” said analyst William Ho of 556 Ventures. “But they needed to go outside to address new revenue opportunities.”

“Verizon has had a pattern of 'growing from within,’ promoting longtime executives to senior level positions, and also rotating executives to different positions within the company,” agreed Mark Lowenstein, managing director of Mobile Ecosystem and a FierceWireless contributor. “This has started to change of late, as Verizon has made some big bets in adjacent sectors (i.e. the AOL and Yahoo! acquisitions), and has realized it needed to diversify its ranks with executives who bring deep experience from other corners of the wireless industry (devices, i.e. RIM, networks, i.e. Ericsson), as well as others industry sectors where Verizon does not have a lot of native experience (i.e. content, advertising).”

To be clear, Verizon’s management still contains plenty of Verizon lifers: John Stratton, presently an EVP and president of the carrier’s global operations, joined Verizon through the carrier’s acquisition of Bell Atlantic Mobile in 1993. And James Gerace, Verizon’s current chief communications officer, directed communications for the 2000 merger of Bell Atlantic Mobile and AirTouch that launched the Verizon Wireless brand.

The new class

But during the past several years, a notable number of new faces have popped up in Verizon’s front office. For example, Diego Scotti, Verizon’s EVP and chief marketing officer, joined Verizon in 2014 from J. Crew (a company that sits decidedly outside the wireless industry). And last year, Verizon named former O2 UK CEO Ronan Dunne as its new EVP and group president for wireless.

More recently, Verizon named former Ericsson CEO Hans Vestberg to head its new Network and Technology team, and Rima Qureshi, Ericsson’s former North American chief, as the operator’s new SVP and chief strategy officer.

Here’s a partial list of the new faces at Verizon:

“The executives Verizon has brought in seem to line up well with the big bets Verizon has made—5G, IoT, content and digital advertising,” said Lowenstein, himself a former VP of strategy for Verizon. “The profiles of these hires also show that Verizon wants to enhance its technology, market and deal-making capabilities.”

“These new players add an international dimension,” added Ho, a longtime industry analyst. Ho pointed out that Vestberg, Dunne and Boulben are among Verizon’s more worldly executives. Ho speculated that their collective experience could help Verizon wend its way into 5G, where carriers in China and Japan are also hoping to stake out a first-mover position.

Ho also said that Scotti and McKechnie could represent an attempt by Verizon to burnish an image and brand that could seem stale in an industry featuring overhauled names like Cricket and T-Mobile as well as heavyweights like Apple. “They need to kind of change their brand and outlook,” Ho said of Verizon, describing the brand as somewhat “parochial.”

But, added Ho, McAdam and Verizon’s board aren’t completely replacing the old guard at Verizon; most of Verizon’s operations executives, such as Stratton and Marni Walden, are still around.

“You don’t want to upset that because they know what they’re doing and they’re doing it well,” he said.

And Susan Welsh de Grimaldo, an analyst at Strategy Analytics, said Verizon's expanded front office is a reflection of a wider trend of collaboration in the industry: "Their inclusion of folks from other segments of industry and outside the industry are reflective of the broader industry trend of an expanding and collaborating ecosystem – and VZ is not alone in finding such hires."

2017 and beyond

And what of Verizon’s outlook, with its newly refreshed front office? That’s definitely still up in the air.

First, Verizon has made no secret of its desire to be at the bleeding edge of 5G, just as it was with LTE. But Verizon’s efforts have been hindered somewhat by standards; the company acknowledged earlier this year that its current 5G equipment may not align with the 3GPP’s initial standards for 5G wireless services, and therefore Verizon may have to upgrade its initial deployments in order to ensure that its services work with the 3GPP’s forthcoming 5G standard.

As for Verizon’s advertising ambitions, headed by Tim Armstrong, those too are facing headwinds. Although Verizon recently introduced its first Oath advertisements, the company is competing in a space where Google and Facebook are widening their lead: eMarketer recently increased its estimates for Google and Facebook’s share of the U.S. digital ad market from 60.4% to 63.1% for 2017.

Finally, Verizon’s top management is also heading into a period of belt-tightening. CEO McAdam recently confirmed that Verizon is planning to cut $10 billion in spending from its operations over the next four years, using an aggressive cost-cutting technique called zero-based budgeting that was also recently used by Sprint.

Of course, Verizon remains the nation’s largest wireless carrier by a significant margin. But that position is by no means guaranteed, and its new strategic efforts may not pan out. After all, have you watched anything on Go90 lately? – Mike | @mikeddano