Verizon is expanding its wireless phone business at a time when key rivals are prioritizing major acquisitions of content distributors.
Service revenue grew 2.5 percent at the New York-based company’s wireless division, which Verizon attributed to customers pursuing higher-access plans, and the division gained 199,000 new phone customers. Companywide, revenue rose 5.5 percent to $22.4 billion.
The increases come as its largest competitor AT&T, whose wireless revenue has remained mostly flat since 2016, battles the federal government over its $85 billion takeover of Time Warner. The Department of Justice recently appealed a federal judge’s decision to allow the transaction to move forward.
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That merger was expected to lead to a wave of consolidation between telecommunications providers and content distributors. Experts cited Verizon — currently the largest U.S. wireless provider — as one company that could be pursuing such a transaction.
Outgoing Chief Executive Officer Lowell McAdam, however, reinforced to investors that network leadership remains central to its overall business.
“We’ve stayed close to that core,” he said on the company’s earnings call, noting that he’s glad Verizon “didn’t follow a lot of the things the analysts and the bankers told us we had to do.”
Some investors viewed the telecommunications company’s decision to appoint Chief Technology Officer Hans Vestberg as McAdam’s replacement as a sign Verizon is seeking to bolster its wireless business instead of pursuing growth in the content space.
Vestberg was responsible for managing the carrier’s infrastructure, particularly the development and deployment of the new fifth-generation wireless network – one of Verizon’s top initiatives. Launching it by the end of 2018, as planned, could give Verizon a significant competitive advantage as a first entrant into the market.
“We are positioned to be the clear leader in the deployment of 5G services based on our technological expertise, asset base, engineering talent and spectrum portfolio,” McAdam said. “This leadership position is attracting opportunities in areas such as over-the-top TV, smart cities, transportation and healthcare.”
Verizon completed its purchase of Yahoo assets in 2017 and formed a new subsidiary called Oath, which combined that acquisition with AOL to create a media conglomerate that bolstered Verizon’s advertising business. Oath’s revenue in the most recent earnings period was flat at $1.9 billion
McAdam on Tuesday also named Houston as one of the four residential markets in which Verizon expects to roll-out its 5G service soon. Others include Sacramento and Los Angeles.
