Verizon Company, Essay Example
The matter of success for a company is measured in the business plan, their marketing strategy, and how they are able to differentiate from their competition. The changes within the telecommunications industry have transformed the unassuming method in which voice communication has expanded as an essential part of the society. The invention of the cell phone and other forms of wireless communications have dominated the realm of innovative technology. It was only decades ago where many people were not familiar with mobile phones, but times have changed and now people are able to contact anyone, at any time or anywhere. In the case of Verizon Company, they are one of the leading telecommunications companies throughout the world that is leading the change in wireless devices. The purpose of this paper is to provide a clear business analysis on Verizon Corporation, detailing the internal and external aspects while also focusing on their business strategy to maintain as a key market player within the industry.
The invention and improvements to cellular phones since the 1980s have systematically change the ways in which people around the world regardless of income or background operate. Cellular phones provide the convenience of being available 24-7, and with the advancements to the forms of applications where people are able to surf the internet on the go, access their emails, and able to search and pinpoint locations have become a necessity in which people need to function. While cellular phones provides hundreds of tools and options, the cellphone market which was once dominated by just a few telecommunication companies have become increasingly saturated. The major growth in influencing the number of service providers is data. More and more customers are looking to upgrade their cell phones to smartphones, and get better deals on data plan services. More importantly there is a new market that is emerging that includes machine to machine wireless data communications. (Verizon) In the competitive market, those that have brand recognitions and loyalty have to maintain a competitive business strategy to position themselves as market leaders for the future. Wireless companies such as Verizon Wireless must constantly change the way they approach the ever growing, and rapidly changing market in order to keep up with consumer demand. Company giants such as Verizon Wireless must consistently reevaluate their business plan and ask where the company can grow from here. With internal and external factors that might affect their place in the international market, it is essential that the reader and the company look at the company, history, and financial analysis in order to move forward in the future.
Cellular phones were first thought of and conceptualized in 1947 by a group of researchers that discovered small cells, and reuse of the frequency spectrum over a range in the service area could create phone traffic. (Bellis) At the time of the invention, the major player in the telecommunications market was AT&T, and the Federal Communication Commission (FCC) was in control over products and services related to telecommunications. The cellular phone at the time was thought of as two way radio, the FCC was permitted to control the accessibility and availability of the frequencies that were needed to use the cellular phone. The first company to come to the FCC was AT&T, with thoughts of opening up the range in the radio spectrum to allow more users, and conduct much needed research of the new technology. (Bellis) At the time, the FCC only allowed 23 phone exchanges to take place one time in each service are. By 1968, the FCC re-examined their policy on cellular phone and increased the availability of frequency if a company were to approach to build a more improved cellular service. The two, Bell Labs and AT&T were the first to launch their proposals for an improved and new system that consisted of having low-powered, small broadcast towers that covered the radius of each cell within the few miles. This would enable the cellular system to experience more growth. By building, more towers users were able to move from cell to cell and keep their service. It was only until 1970s the first brick like handheld portable device was created and placed the first phone call. (Newstream). Dr. Cooper, who placed the call invented the phone in order to emphasize that people should be able to communicate without any limitations. In the 80s, ten years after the first call, cell phones launched into the market. Motorola became the first company to introduce a cell phone, the DynaTac, 16-ounce mobile phone with a hefty price tag of $3,500. (Newstream) As the market grew, so did the customers, and by 1990, there were over a million customers in the United States alone, and presently there are close to 5 billion subscribers in the developing world. (MobiThinking)
In the United States alone, there are over 290 million mobile subscribers, with over 27 percent of homes in the United State solely rely on cellular phones as their primary voice services. (Verizon) The vast change in subscribers in just over 2 decades is reflective of the innovations in technology that have created new, faster, and lighter cell phones that are frequently being launched every month. Compared to the first cell phone now phones are weighing as little as 3 ounces, they can be as little as a watch, and they range in prices from $20 to the very luxurious and rare $1,500 price tag. All these cellular phones and mobile customers subscribe to the 30 facility based wireless service providers in the United States, with the top company Verizon Wireless as one of the founders of the cellular system.
Verizon Communications (Verizon) was created through many mergers and acquisitions from now defunct telecommunication companies. The Advanced Mobile Phone Service Inc. (AMPS) in 1978 was developed by AT&T in order to provide a more comprehensive cellular service that was nationwide. The birth of Verizon started in 1983 as a part of the Philadelphia based Bell Atlantic. The FCC forced AT8T in 1984 to split up its operations into seven “Baby Bells), or Regional Bell Operating Companies. The Baby Bells were Bell South, Bell Atlantic, US West, Ameritech, Southwestern Bell Communication, and Pacific Telesis. (Verizon) The Baby Bells changed through mergers and name changes as the Southwestern Bell became known as SBC in 1995, and they acquired Ameritech and Pacific Telesis in the following four years. Bell South acquired AT&T in 2005 and US West was brought by Quest in 2000.
In 1995, AMPS developed Bell Atlantic Mobile and NYNEX Mobile Communications, with the two companies then merged in 1997, keeping Bell Atlantic name. Bell Atlantic was brought by General Technology & Electronic (GTE) and changed their name to Verizon Communications. In 2000, becoming, GTE became the first provider to offer nationwide cellular service. After the merger of the two companies in 1997, they developed a joint venture with Bell Atlantic Mobile and Vodafone AirTouch (UK Company). The joint venture formed received their regulatory approval they began operations as Verizon Wireless. (Verizon) With the merger of GTE and Verizon, Verizon Wireless become the nation’s largest wireless provider until the merger of AT&T and Cingular. Verizon Wireless soon acquired West Virginia Wireless in 2006 along with Rural Cellular Corporation (Unicel) in 2007, and the acquisition of Alltel Wireless in 2008 for $5.9 billion to surpassed AT&T as the US biggest mobile phone company.
Verizon Wireless has invested over $40 billion of their money into increasing the coverage area of their customers, they have developed new ways in which, to accommodate the capacity of their networks were they want to maintain their leadership position, reliability, and providing new services. Verizon Wireless is one of the two largest mobile phone operators that offer CDMA2000, and they also offer IS-95, 1x, EV-DO, and 4G LTE services. Verizon Communications is now based in Manhattan, New York and is the current leader in the US market. They offer landline and wireless communication services to businesses, governments, wholesale customers, and the mass market. Verizon operations include, Verizon Business that provides seemliness and innovative business solutions for customers worldwide, and Verizon Telecom that offers their millions of customer services and benefits of the best wireless coverage. Their line of businesses includes, Business, Residential, and Small Business. Other services they provide include entertainment and information over their fiber-optic network. The services overall that Verizon offers includes voice services, 3G and 4G data services, and their wireless broadband service EV-DO Rev A.
On their phones they offer picture messaging, text messaging, internet browsing, emailing, downloadable applications, media content provided by their Media Center, Video on Demand (V Cast), GPS, Push to Talk services, and many other services provided through their mobile apps. Their services beside mobile communications include home and business internet, phone (wireless and wireline), and television services (FiOS TV) that are quick and efficient broadband connections that provide high definition video and high quality that also allow for interactive services on some qualified televisions. Catering to their business services, Verizon Communications delivers exceptional products such as Security, Global IT, and Communication Solutions offered to global government and service enterprises with multiple solution and business strategies. (Verizon) According to research their Verizon Enterprise Solutions (Verizon Business) offers cloud-based services that support over 75 countries, with a global IP network within over 150 countries, and 99% of Fortune 500 companies throughout the world using Verizon Enterprise Solutions. (Verizon)
Verizon Communication is the global leader in offering broadband, wireless, and wireline communications to a host of consumers. (GSMA Intelligence) They offer flexibility in contracts to their mobile subscribers that include, prepaid, family plans, individual plans, data plans, and numerous business plans. Verizon Communication also serves as the global leader in providing print and on-line directory information. (Yahoo) Verizon’s main mission is to remain the biggest and reliable network that allows their global customers to communicate with each other. Verizon’s vision is to be the most reliable, respected, and largest communication brand within the mobile industry. According to the survey conducted by J.D Power and Association in 2012, Verizon Wireless is the number one rated company that provides the highest network quality amongst other national providers in the U.S six geographic areas. (Fabrikan) Making it the first mobile provider to be placed first across all regions.
In understanding the development of the industry and the competitive market, one must comprehend the many mergers and acquisition that were a product of the FCC force of AT&T to split its operations into the seven Baby Bells. The first commercial cellular system was created during the 1980s in Chicago. In 2000 as the number of mobile subscribers reached over 100 million, the mobile market became heavily saturated and competitive. Smartphones replacing “dumb phones” make up at least 40 percent of the mobile market. 31 percent of mobile users use smartphone, with the number projected to be even higher in 2015. (Verizon) According to Pew, two-thirds of Americans have wire-line broadband service in their homes replacing the high-speed wireline internet connections. The U.S mobile market is considered the largest telecom market within the world and is growing faster than other developed countries, including China. By 2015, they are expected to total $721 billion in revenue with a revenue growth rate of 3.7 percent each year. The mobile (wireless) market serves four leading mobile operators that offer nationwide mobile phone service that includes, Verizon Wireless, AT&T Mobility, T-Mobile US, and Sprint Corporation. AT&T and T-Mobile US offer GSM standard services, while Verizon Wireless and Spring Corporation offer CDMA, each now offers 4G and LTE services to their wireless mobile customers. The market is saturated further by regional operators that are increasingly growing, and subsidiaries and mobile virtual network operators (MVNOs). The regional operators include, Cricket Wireless (Leap Wireless), C Spire Wireless, and U.S Cellular. The subsidiaries and MVNOs are Boost Mobile (Sprint), MetroPCS (T-Mobile), Virgin Mobile, (Sprint), H2) Wireless (AT&T), Red Pocket (AT&T), and TracFone Wireless which is an MVNO of T-Mobile, Sprint, AT&T, and Verizon, and owned by America Movil (Mexican operator).
In the U.S alone, there are over 190 facility and non-facility based wireless service providers. The Top 8 include Verizon Wireless, AT&T, Sprint, T-Mobile, TracFone, MetroPCS, U.S Cellular, and finally Cricket Wireless. Verizon Wireless main number of subscribers comes from their retail consumers that make up over 100 million. Verizon Wireless like others offers a variety of phones to the user at several different stores. The type of cellular phones has differed since the inception of cellular mobile phones in the market during the 1990s. According to Mobi Thinking, the basic phone (phone and text services) still makes 122 million shipments, but will decline in 2016, with a market growth of negative 17 percent. (MobiThinking) The feature phone (voice, text, and web browsing capabilities) has shipped over 750 million in 2012, with the number slightly decline in 2016 by negative 3.8 percent. The smartphone which has grown rapidly within recent years, is currently being used by over 700 million, and will continue to grow at 17.9 percent. The mobile phone has surpassed being just for voice service device that fits in the pocket now the mobile market services, tablets, notebooks, and netbooks. The tablet has 114.6 shipments, which is looking to grow by 35.6 percent by 2016. (Mobi Thinking) The notebook has had over 200 million in shipments with the number looking to decline by negative 5.9 percent by 2016, and netbooks fairing no better with 18.3 million units shipped, and a whopping decline of negative 65.4 percent by 2016. (Mobi Thinking) Smartphones contain over 60 percent of the mobile device market share with them being available from multiple mobile phone manufactures that have also infiltrated and created mass competition between national wide service providers. The vendors include Samsung which is the market leader with 22 percent of the market, Nokia, Apple, ZTE, LG, Huawei, TCL, Blackberry (RIM), Motorola, and many others that make up 33.6 percent of the market share. The United States alone has over 250 million mobile subscribers that have penetrated over 90 percent of the U.S population. (MobiThinking)
The smartphone market which is growing at a rapid pace continues to be the go-to mobile device for customers. The smartphone market leaders include Samsung, Nokia, and Apple. The smartphone market is fickle, with market leaders changing each year, and the market penetration being lower at only one billion in use worldwide. The surge in smartphone and other mobile devices has helped the wireless mobile industry. Verizon Wireless still reigns supreme over the other wireless operators. CNN reports that, “U.S. wireless penetration topped 102% in 2012, according to the wireless industry association CITA. At the same time, mobile demand in high-growth emerging markets is poised to explode.” (Harrison) The way that Verizon is staying above the competition is by the core competency in which they provide pure technological innovations and superb customer service. Through Verizon Communications many acquisitions of principal and regional companies, it has provided them with expanded coverage, better than the rest of the competitors. They provide innovative services that include 411 assistance, instant messaging, business solutions, government, global, and residential services that other operators within the United States do not. Verizon’s acquisitions have enabled them to own large amounts of the frequency spectrum, where they can price their roaming charges and increase their revenues.
The US mobile market is intensely competitive with Verizon Wireless constantly having to change up their business strategy, and products and services to constantly defend their lead from the other top companies. However, their position has remained steady in being the nation largest provider of 4G LTE network services, the most reliable of 3G service network, it services are used by over 250 million people that accounts for over 75 percent of the population within over 330 markets. Verizon accounts for over 108 million subscribers, which trumps AT&T with over 103 million subscribers, followed by Sprint and T-Mobile with 55 million and 34 million subscribers respectively. (CTIA) The moves of Verizon keep expanding its capabilities into the national and global markets. Their position is unparalleled to other services as they deliver the first 3G multimedia services with data service and global voice all over the world, and have made over $100 billion in revenue in the past years. In trying to remain the top provider, they inquire several risks that affect all functional areas of the business.
The macro environment in which Verizon operates in is evolving at a rapid pace as the technology is growing just as fast. The industry in which Verizon is the leader provides customers with TV distribution and service, telephone, and internet. The companies provide these services through systems such as receivers, satellites, computers, mobile phones, transmitters, and wires. The telecommunication operators who provide services are built to maintain the networks in which customers are able to communicate. The networks are built at either existing infrastructures or nonexistent as in the case of undeveloped countries. The mobile market was not exempt from experiencing a shift in consumer spending during the recession. It hit the global market as well, but largely the industry has rebound thanks to the innovations in phone technology, and mobile devices where cloud computing is emerging as a prime derivative of business and enterprise solutions. (Verizon) Verizon runs the serious risk however, of underestimating their competition as consumers are increasing their demand of mobile data and services.
The recent decline in traditional wire line services has taken a small percentage of Verizon’s total revenue. The decrease in demand and connections, as meant an overview of the company’s strategic divestitures of wireline assets. AT&T is not far behind in this ongoing tug a war for the market leader, and the emerging regional and national companies are gaining steam as customers are looking for more affordable options that offer more service without all the contracts. The risks involved in this gamble is with Verizon placing all their bets on the national mobile market. According to Harrison with CNN Money, “The challenge in Entner’s view is not that Verizon bet too big on the U.S, but whether it can hold its place as the market leader amid rising competitive threats. He said AT&T (T, Fortune 500), T-Mobile and Sprint (S, Fortune 500) have all “put massive bets” on the market, leaving Verizon to defend its lead.” (Harrison) The competitive market in which Verizon operates is filled with apparent political risk in which the company is on constant alert for changing laws nationally and internationally. The decline in landlines since the switch to wireless is affecting their bottom line. Verizon still offers landline phone services in some select markets, but the demand has reduced inherently that might affect the revenue stream, and other market problems where the economy is cutting down on their expenses. The stringent law placed on teenage drivers while beneficial, Verizon has to be innovative in creating new products where customers are able to enjoy Verizon services that accommodate these laws. While the US economy is recovering from a recession, another economic slowdown could negatively affect the US market or other leading markets, which could impact the demand and the affordability of Verizon products and services. (SEC) Consumers seek to reduce unnecessary spending and elect to forgo purchasing unneeded products, but instead choosing to purchase low cost services and products from competitors. According to the SEC, “Similarly, under these conditions the business customers that we serve in the United States and abroad may delay purchasing decisions, delay full implementation of service offerings or reduce their use of services.” (SEC) More importantly the risks of the economy present conditions in which Verizon subscribers would not be able to pay for services, and could have an adverse effect on operations and revenue.
The intense competition is a coupled with rapid growth in new technologies, where traditional differentiated communication services such as cable and internet, wireless, and long distant have brought out more competition that has saturated the market. The market has invited not only wireless mobile providers but cable companies, telephone companies, satellite providers, application and device providers, VoIP providers, and electric utilities. The competition provides new inherent risks of substitute or copy services, as well as allowing service providers to broaden their scope and offer competitive pricing on Verizon’s offerings. The ability for Verizon to operate at its full capacity against its emerging capabilities that are dependent the quality of network, capacity and coverage, pricing, customer service quality, reach of sales and distribution channels, capital resources, and development of new and advanced services and products. The customer service is problematic as it is not only a risk for HR, but customer turnover, a problem that trickle downs to employee satisfaction and retention. The risk presented with emergent technologies is Verizon capabilities to adapt and enhance their existing services and products in order to keep up with customer demand. The inherent risks of not being able to create services satisfy customers on a timely basis run the risks of turning customers over to the competition. One of the biggest risks that Verizon identifies is, “If our services fail to gain acceptance in the marketplace, or if costs associated with implementation and completion of the introduction of these services materially increase, our ability to retain and attract customers could be adversely affected.” (SEC) This is a weakness of the company that must be addressed to remain the market leader.
The environmental impacts of technology, natural disasters, and/or terrorist attacks could adversely affect Verizon. Breaches in data infrastructure do in part by cyber-attacks due to lack of security protocols is potentially harmful for the customers, and the company The risks of pricing above what they would pay could ultimately drive subscribers away and decrease the market share. Verizon has in place security measures and protocols that are prepared in case of a cyber-attack or terrorist attack. The environmental risks are also essential to Verizon. They are not without their share of controversy as they had to pay a settlement when the government discovered violations of the federal environmental regulation in over 650 facilities in 2009. (Berlin) Catalogs, devices, and paper receipts that customers do not recycle contribute to the increasing amount of Verizon’s environmental costs. While the company offers paperless billion and other options that cut down on tree cutting, there are several environment risks to customer heath. According to research, the radiofrequency emission from mobile phones can be linked to serious health problems that could cause cancer. There have been several lawsuits filed against the company, and more are reported to increase. In part to adhering to the environmental factors that might harm the profit and the health of hits consumers, Verizon has implemented their sustainability policy to keep the company operating.
Verizon Wireless is made a success not only by their business strategy of smart mergers and acquisitions, but also the training and knowledge of their employees. The infamous, “Can You Hear Me Now” campaign which increased the customer based, and lowered the customer overturn was a product of how Verizon actually operates. According to Verizon, they actually employ test people that perform network studies. They are made up of groups of engineers which placed over 3 million voice call attempts, and over 16 million data tests each year on the Verizon network. They also perform the same set of test on competing network carriers, where they travel up to million miles on the more trafficked national roads throughout the United States. (Verizon) Within their equipped test vehicles, they place a test call and calculated the success rate of the call, drop signal calls, and the unsuccessful call attempts. In testing their data. They calculate the speed of file uploads, downloads, web browsing, and others in a similar fashion to their voice tests. (Verizon) These tests are conducted in order to maintain Verizon’s integrity and honesty of being the most reliable network in proving they have the lowest rate of dropped or unsuccessful call attempts compared to other carriers.
Verizon has implemented an innovative marketing strategy in which they have relied on catering to the target market, and marketing to other mixed variables in order to offer solutions to their growing customer demand. The target base includes the young, the old, and the elderly with a diverse customer base that ranges in phone types of featured (basic) and smartphones. (Verizon) When Verizon configures their strategy they rely on the components of their employees, financial situation and outlook, customers, and operations. When thinking about each of these four categories, they consider the wants of the customers, more reliability, data coverage, data plans, and others. Verizon considers the needs of their employees, who are looking for ways to improve on their knowledge for products by offering to expand training. The operations and financial wants are to increase the efficiency and decrease the workforce while increasing operation income, and revenues. (Verizon)
In order to remain competitive and the market leader Verizon has implemented the strategy of acquiring their competing firms to further their growth, this has become a valued business strategy where they are able to expand their data coverage, products, and services domestically and internationally. They have developed their market by merging and acquiring smaller, and strategic firms throughout the market to expand in existing and newer markets. Where they have found much success in business tactics to become a market leader, they have also developed business strategies that have placed them in political and financial situations, where they have lost money and lost some customers. In advertising their EV-DO wireless data network, Mobile Broadband, they used some language that was not told to customers that they would be restricting their activities on the service. Although it had been offered as unlimited data service. The fine print however read that it would have only a limited of 5 GB each month. (Thompson) The CEO said at the time that the world “unlimited: was just a word, and received a bit of backlash from consumers. Other failures by Verizon came in parody to Apple “Got an App for that”, Verizon created the slogan, “there’s a map for that”. However, Verizon claimed in their commercial that 3G coverage was five times better than AT&T. However, AT&T filed a lawsuit against Verizon by saying it is misleading because they both reach the same amount of customers. (Vaughn) Verizon however, prevailed in the case, and AT&T is still supporting the notion that they offer the same if not better coverage than Verizon.
The company has long made the commitment to help the environment by implemented Verizon initiatives in order to reduce waste and conserve energy. The company has spread this policy to their retail stores as they operated energy efficiency, and in some if not most locations they use solar panels in order to operate cell sites into remote areas. By reducing waste and implementing a trade-in program where customizer can recycle their old phones in order to provide cell phones to the homeless, and victims of domestic violence. According to Verizon, their long term sustainability goals include, reducing the carbon intensity in 2020 by 50 percent. As of now it is 10 percent while in 2009, it was 37.48 percent. (Verizon) Expanding their Green team that has over 10,000 members, collecting e-waste, and received their Energy Star certification on 90 percent of their retail stores. They have earned the LEED, modified accessory packaging, increased device recycling, and devoted 40 percent of their supplier spending to firms that are reducing the carbon emissions. (Verizon)
One of the major concerns of Verizon, including continuing to be the most reliable services for customers is reducing the environmental impact while delivering a competitive advantage to the industry. Their first step is to set new energy standards to their supply chains. According to Verizon, “In 2009, we were the first telecom company to set efficiency standards for network equipment purchased from our suppliers. We changed the game again in 2012, establishing a strategy for reducing the carbon emissions in our supply chain.” (Verizon) Verizon wants to implement alternative energy for cell towers by launching energy projects to extend the wireless network to customers that live in remote areas. In their efforts, Verizon has developed a partnership with National Renewable Energy Laboratory to test the combinations of wind, generator systems, solar, and battery for remote cell sites. (Verizon) Verizon has moved to provide greener packaging in increasing the number of customers to recycle their own phones in order to help others, and create better packaging for accessories. For their home services, they have moved for set top boxes to be programmed for new energy efficient rules, and have created mobility centers to provide employees more flexibility in where they want to work. Verizon has not only moved to make an environmental impact with consumers, and their employees, but also reaching out to the community by enlisting school districts to use efficient means to monitor speed and the idle time of the bus fleets, in order to create routes to be more energy efficient.
While the creation of the Verizon Foundation was established to develop energy programs for low-income consumers, in order to receive technology solutions to help them be more energy efficient and effective. (Verizon) There corporate responsibility was to remain an innovative force to make a change within the environment. Verizon Wireless employs almost 200,000 employees and are dependent on training them to the fullest extent, and providing them with the benefits to be satisfied with their jobs and grown in the company. Their strategy to remain not only customer friendly but employee friendly is what helps to make the company a successful place to operate and work. By making a difference with the way in which it operates it can affect the way its facilities operate, customers can contribute, employees are making a different, and other ways in which they can change the way other leading companies do business.
In looking at the overall analysis, there is more that needs to be done on Verizon’s part in order to remain the market leader. They must continually change up their business plan and keep an ear to the rapidly changing consumer market and technological advances. In order for Verizon to compete they must stay innovative and creative in their ads and commercials. While continuing to tell the truth they must work to target the younger audience, whose wants and demands change at the drop of a hat. Verizon needs to focus on creating future business models that include expanded data services, increasing their customers by offering customizable plans at an affordable rate, and create other bundling services. The trend in the market is for mobile data are having a significant positive financial impact on the company’s revenues.
With the decline in demand for wireline connections, and the oversaturation of the wireless mobile market, it is still new markets developing as innovation is increasing. Verizon must develop or acquire more phone systems that provide the capabilities that allow children to; instant message, text message, document share, telepresence, and video conference on one device, instead of just voice communicating. More marketing strategies must be developed to show different opinions and cross over to other markets in order to influence more potential customers. However, Verizon has done an excellent job in diversifying their investment portfolio, smart in acquiring multiple firms in order to be the top leader. Verizon has taken the time to research, fund studies and projects, and invest money in different areas in order to be the world’s most reliable network.
By looking at Verizon’s financial overview, one can figure out or estimate their future success of failure within the wireless mobile industry. Their balance for the present year shows that the current amount of assets that Verizon owns $276,675,000,000 (assets) while they have about only $100 billion. Yahoo shows that Verizon will continue to grow at rates of 18.99 percent in revenue, and will produce a 5 year return at 111.2 percent. Looking at past historical financials, Verizon had a debt to capital ratio of 52.34 percent, were the assets total over $200 Billion and liabilities were under $60 billion.
The cash flows for Verizon last year decreased by $10 billion; however, Verizon made up for it in operations earning over $300 billion giving it a cash flow margin of 27.18 percent. (FT) Verizon used a percentage of their money for more investing activities and financing cash flows. Looking over the cash flow each year, Verizon improved, and the company has grown.
Looking at the income statement, one can conclude that from the past years, the net income has fallen despite the increases in revenue. The many acquisitions of the company while remain a risky endeavor, the revenue is driven by the retail market and the wireline connections. The revenue has increase in each year, and by 2017, the revenue is expected to be around $150 billion, however, they are still improving. According to Business Weak, debt is not a significant factor, and their 37 percent is in regulations with the Diversified Telecommunication System industry norm. The industry has provided Verizon with enough operating profits to cover their debt, and have typical accounts receivables.
According to industry analysis Verizon is positioned to remain the market leader if nothing external or internal were to compromise their position. Verizon is poised to earn close to $150 billion, estimated with an average growth rate of 4.60 percent, their amount quarterly will increase as well as the Q3 in 2013 was at $30 billion, in 2014 it will be near $30 billion as well with an average quarterly rate of 1.10 percent. The financial forecast for the next five years for Verizon shows an amount of $150 by 2017, the net income will slightly improve to $60 billion by 2017, with the balance sheet, and cash flows keeping with the business norms and operating at an efficient level compared to their competitors. The chart below provides an estimated look at the next year with the calculate growth rate for not only revenue, but income, and cash flows for Verizon Communications, without taking into account the external and internal factors that might affect the company’s success.
Overall, Verizon has experienced success in a short amount of time. With just the market introduction of the cellular phone in the 1980s, there have been several other companies that have joined in the market providing an oversaturation, leaving 95 percent of market penetrated. Verizon reigns leader and is one of the top Global companies as well offering numerous products and services to domestic, global, residential, retail, enterprise and small business consumers. They provide television, internet, business solutions, wireless services, and others to over 200 million of their subscribers. As they enter into new markets for data and cloud based applications they must continue to reinvent their business plan, and strategy, continue to acquire and merge companies that provide them a larger share of the market. These initiatives to provide data service to those in remote areas helps to place Verizon on as one of the companies that not only cares about preserving the environment but also staying true to their mission and their vision.
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