Verizon Chief Hans Vestberg Restructures Around Three Businesses

(Bloomberg) -- Verizon Communications Inc. unveiled a reorganization focused on three groups -- consumers, business customers and media -- as part of Chief Executive Officer Hans Vestberg's plan to advance 5G wireless technology.

Vestberg, who spent his entire career at communications-equipment maker Ericsson AB before coming to Verizon in April 2017, is making network technology a priority throughout the company. Fifth-generation wireless service, or 5G, is a particular focus.

“All of our consumer groups will be served by 5G,” Vestberg said in an interview Monday. “That is transforming how we impact the market.”

After interviews with 300 of the company's top leaders over the past several months, Vestberg has drafted a plan to reconfigure the current structure, which was a collection of separate businesses like wireless and the Fios landline video service. Under the new grouping, which takes effect Jan. 1, delineations between wireless and landline are being replaced by a focus on end customers, either consumers or businesses.

Ronan Dunne, the former head of wireless, will lead Verizon's consumer group, and Tami Erwin will lead the business group. Guru Gowrappan, who currently runs a division known as Oath, will lead the media operation. That unit is trying to create a digital-advertising business to challenge giants, including Alphabet Inc.'s Google and Facebook Inc.

Oath Name

Oath, which was formed when the company acquired online properties AOL and Yahoo, will be renamed Verizon Media Group/Oath under the new structure. The rebranding appears to be an effort to sideline a name that has drawn ridicule on social media. The name Oath was part of an in-house branding effort led by media chief Tim Armstrong, and it was greeted by some scoffs. Verizon's own TechCrunch site tweeted simply, “Oof.”

As the industry transitions to 5G, Verizon aims to capitalize on its network investment and gain a lead in new services while its competitors are challenged by merger integration. Its largest rival, AT&T Inc. also is preparing a 5G network, but it's been busy turning itself into a media conglomerate. And T-Mobile US Inc. is seeking approval for its $26 billion takeover of Sprint Corp.

As for Verizon's mergers-and-acquisitions outlook, Vestberg said he remains uninterested in acquiring large TV companies. In the wake of AT&T's $85 billion bid for Time Warner Inc., Verizon considered deals with Charter Communications Inc. and CBS Corp., but walked away.

Staying the Course

Vestberg said he's staying the course on deals. “Our view is no different today than it has been,” he said. “We have the network strength and great assets, and that's how we think about the next five years going into 5G.”

To solidify its position as the largest U.S. wireless carrier, Verizon paid $130 billion for Vodafone Group Plc's stake in their mobile joint venture in 2014 under then-CEO Lowell McAdam. After failed experiments in video delivery, like a partnership with Redbox and a streaming service aimed at teens, called go90, Verizon decided to offer its new 5G customers TV services through Apple Inc. and Google.

Verizon will start its 2019 reorganization as a smaller company. As many as 44,000 employees -- more than a quarter of its total staff -- have been offered buyout packages as part of a $10 billion cost-cutting program. Qualified employees have until Saturday to decide whether to take the exit offers.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III

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