INTRODUCTION
Verizon communication is a well renowned gigantic multinational cell phone company, founded in 1983. The company has specialized in making cell phones as well as other diversified technologies ranging from tablet PCs to calling, internet and wireless services. The company has a huge customer base of approximately 25 million, which acts as a competitive edge for the company.
Verizon Communications
Subscriber Decomposition
(In Thousands)
| Fiscal Years Ending Dec. 31 |
Dec '11 |
Dec '12 |
Dec '13 |
2014E |
|||||
| Wireless | |||||||||
| Retail connections |
92,167 |
98,230 |
102,799 |
107,425 |
|||||
|
5.29% |
6.58% |
4.65% |
4.50% |
||||||
| Retail Postpaid | |||||||||
| Connections |
87,382 |
92,530 |
96,752 |
100,864 |
|||||
|
5.12% |
5.89% |
4.56% |
4.25% |
||||||
| Retail Prepaid Connections |
4,785 |
5,700 |
6,047 |
6,561 |
|||||
|
8.50% |
19.12% |
6.09% |
8.50% |
||||||
| Retail Connections Churn |
1.26% |
1.19% |
1.27% |
1.30% |
|||||
|
-8.70% |
-5.56% |
6.72% |
2.36% |
||||||
| Average Revenue per | |||||||||
| Account |
$ |
66.90 |
$ |
68.33 |
$ |
69.79 |
$ |
70.61 |
$ |
|
5.25% |
2.13% |
2.13% |
1.18% |
||||||
| Wireline | |||||||||
| Total Voice Connections |
24,137 |
22,503 |
21,085 |
20,067 |
|||||
|
-7.17% |
-6.77% |
-6.30% |
-4.83% |
||||||
| Total Broadband | |||||||||
| Connections |
8,670 |
8,795 |
9,015 |
9,195 |
|||||
|
3.31% |
1.44% |
2.50% |
2.00% |
||||||
| FiOS Internet Subscribers |
4,817 |
5,424 |
6,072 |
6,497 |
|||||
|
18.01% |
12.60% |
11.95% |
7.00% |
||||||
| FiOS Video Subscribers |
4,173 |
4,726 |
5,262 |
5,736 |
|||||
|
20.19% |
13.25% |
11.34% |
9.00% |
||||||
| Total Wireline Customers |
41,797 |
41,448 |
41,434 |
41,495 |
|||||
|
-0.36% |
-0.83% |
-0.03% |
0.15% |
||||||
| Average Revenue per User |
$ |
81.11 |
$ |
79.98 |
$ |
78.89 |
$ |
77.66 |
$ |
SOURCE: (Research, 2014)
The company has earned its customers’ satisfaction as well as their confidence by facilitating them with excellent quality products and services as well as exceptional customer care services. Moreover, the company has formed business relationships with gigantic multi-nationals, which have allowed the company to penetrate into different markets easily and effectively.
The company’s top priority is to facilitate its customers with exceptional quality services and products at low costs. The company has been making its back breaking efforts in order to achieve its objective and other goals. The company was the first one to introduce the concept of 4G LTE in 39 major markets of United States, facilitating across 110 million people.
The unconditional customer care services and diversification of products and services has made the company to earn the customers loyalty as well as it has also allowed the company to secure a leading position in the wireless industry.(Brock, 2014)
SOURCE:(Research, 2014)
Furthermore, the company has also made partnerships with Google android services in order to diversify its products. The company has developed various technologies, devices and applications under DROID brands as this has also attracted the customers towards the company, which has subsequently increased the overall customer base of the company as well as this has increased the overall profitability and expansion of the company.
In addition to this, the company had acquired Hughes Telematics Inc., in order to grow robustly through the efficient and effective delivery of advanced automotive and fleet telematics. The company has also acquired 45% shares in another gigantic company named Vodafone in early 2014 in order to innovate its products efficiently and effectively in such a way that the products and services offered by the company are able to cater the needs and demands of the customers efficiently and effectively.
In early 2015, the company completed the acquisition of AOL in order to grow and facilitate its LTE wireless video as well as its OTT strategy. Moreover, this has also allowed the company to grow its IoT platforms. Thus, in past 5 -7 years, the company has made many business relationships and acquisitions with well-known gigantic companies in order to ensure the robust growth of the company.Verizon Communications Inc Case Solution
MACRO ECONOMIC REVIEW
The real GDP of the telecommunication industry is varying over the period of time, which shows the uncertainty of the profits and expected returns in the telecommunication industry. The chart below shows in the third quarter of 2013, the GDP rate was 4.1% whereas, in the fourth quarter of year 2013, the GDP rate has a growth of 2.6% annually. This shows that the real GDP of the company is growing with the period of time, which further depicts that the GDP growth is improving over the period of time.
Furthermore, in the first quarter of 2011, there was a drastic decrease in the GDP of the economy, but the demand in the telecommunication industry had later increased the overall GDP of the economy. Upon analyzing the trend of GDP, it was expected that the GDP would further increase to 3%. This growth would have a positive impact on the business of Verizon as well as it would also create opportunities for the company to expand its area of operations.....................
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