Verizon didn’t reveal a lot of new information during an analyst event Monday evening, but CEO Hans Vestberg and his team did their best to reassure everyone that they’re on the right track to turn the corner in the Consumer group. However, an uptick in postpaid net adds is not likely to happen this quarter.
That’s in part because the first quarter historically is a sluggish one. But the real kicker is a $4 price hike starting March 1 for Verizon customers on select older plans. Customers with 5G Get More, 5G Play More, 5G Do More and 5G Start unlimited mobile plans will see their monthly bills increase, as CNET reported.
This latest move follows price increases last year and in 2022. It comes as rivals are raising rates in various ways as well.
A Verizon spokesperson told Fierce the company started sending out letters to customers a few weeks ago to inform them of the change. Pricing for customers on the newer myPlan platform will remain the same. Customers on older plans are urged to move to myPlan, which promises to save customers money on perks like Netflix, Disney Plus and Max.
Hooray for myPlan
Indeed, during the analyst meeting, Verizon executives gave myPlan two thumbs up for driving much of the company’s momentum. Introduced in May, the plan was well received and already has about 30 million customer lines on it, according to Sowmyanarayan Sampath, CEO of the Verizon Consumer group.
Sampath has overseen other changes as well since he moved over from the Business group last spring. One of those is changing the structure of its sales divisions from a national organization to one where the country is divided up into six markets, each with six to 10 different territories.
Every territory gets its own boss who is able to make decisions a lot quicker than if they were working under a national regime. In addition, Verizon has adopted a new sales compensation plan, awarding individuals rather than basing it on group performance.
There’s a similar strategy going on within the networks division where local personnel are given more leeway in making decisions.
Early in 2023, Verizon set up an 18-market structure within the networks division, where one leader in each market has the authority to build, operate and optimize the network in the same place they live, work and play. “It’s really proven to be an outstanding structure,” said Joe Russo, EVP and president, Global Networks and Technology.
Explaining why capital investments will be lower this year, Russo said some big capital-intensive programs are wrapping up. Verizon now has more than 50% of its cell sites operating on its own fiber. The 5G Standalone (SA) core is fully operational, as well as the Intelligent Edge Network.
While capital investments in the network are coming down – Verizon expects to spend between $17 billion and $17.5 billion in 2024 – “you should know that I’m not slowing down,” in terms of the Ultra Wideband buildout with C-band and millimeter wave, Russo said.
Prepaid woes
Verizon appears to be making a comeback after some dark quarters in the postpaid realm, but its prepaid division is still in a state of disarray. Verizon reported a net loss of 289,000 prepaid customers in the fourth quarter 2023, which was worse than the 175,000 losses in the year-ago quarter.
Following Verizon’s Q4 earnings report last month, MoffettNathanson analyst Craig Moffett called Verizon’s TracFone acquisition “a disaster.” Verizon’s whole prepaid gambit is tied to the 2021 acquisition of TracFone.
Verizon didn’t say a lot about what it’s doing to win back prepaid customers, but a concerted effort is underway to build up the Total by Verizon and Visible prepaid brands. The company has opened nearly 700 stores for Total by Verizon – a figure that was close to zero a year ago.
“TracFone was an important acquisition for us,” Vestberg said, acknowledging there were challenges in the beginning that Sampath is now addressing.
MEC remains in play
A few years ago, Vestberg was evangelizing Mobile Edge Compute (MEC), boasting about Verizon’s leadership in this area and prospects for growth. Conversely, industry analyst and Disruptive Analysis founder Dean Bubley called it “MEH,” for Mobile Edge Hype.
This week, Vestberg acknowledged he was “too early” on Mobile Edge Compute, but “early also means we’re a leader in this.” He still firmly believes in the opportunities for MEC and “this is a long play for us,” he said.
AI opportunities
Verizon has been using AI for years, ingesting billions of data points from the network into its AI engines to develop insights in areas like customer care.
Of course, Verizon has a lot of data but it sits in thousands of different data sources. Therefore, it’s in the process of bringing the data together in common platforms, which is expected to lead to lower costs and speedier insights.
More management changes
There’s been a lot of movement in Verizon’s executive ranks and that continues.
Rima Qureshi, chief strategy officer, is leaving Verizon and her replacement is Chris Bartlett, formerly CFO of the Business group. Qureshi joined Verizon in 2017 and previously was president and CEO of Ericsson North America.
Verizon previously announced that Stacy Sharpe will replace Jim Gerace as EVP and chief communications officer. Gerace is retiring after 37 years with the company. Sharpe starts March 4.