The Competition in the Telecommunication Industry Between Verizon and AT&T

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Verizon Communications Inc. is a world-renowned American telecommunications company that has an estimated net worth of $131 billion. Verizon claims to provide coverage in over 190 countries around the world which exemplifies how popular and reputable the company has become world-wide. Its headquarters are located in NYC while its corporate functions and executive leadership are in New Jersey. Verizon was founded in 1983 in Delaware under the name Bell Atlantic. Later, in 2000, Bell Atlantic changed its name to Verizon Wireless after it merged with GTE. During that same year, Verizon started to trade in the New York Stock Exchange with the symbol, VZ. In 2004, Verizon became one of thirty companies to be calculated into the Dow Jones Industrial Average. As the company began to grow in wealth, Verizon acquired AOL in 2015 and Yahoo in 2017. As a result, both AOL and Yahoo became known as “Verizon Media” since Verizon owned and used them for its own personal benefits. All of these important events turned Verizon Communications Inc. into the company that it has become today.

Today, Verizon Wireless has many executives managing the company. Although there are many executives at Verizon Communications Inc., these are the three most important ones; Hans Erik Vestberg who is the Chairman and Chief Executive Officer, Matthew D. Ellis who is the Chief Financial Officer and Executive Vice President, and Kyle J. Malady who is the Chief Technology Officer & Executive Vice President. In addition, the company has around 139,400 employees currently working for them. Therefore Verizon is the largest telecommunications company in the United States (in second place, after Verizon, was AT&T.) In 2016, AT&T was the largest telecommunications company in the United States until Verizon surpassed it, which has maintained that title to this day.

Verizon is leading the telecommunications industry due to the fact that it has an abundance of products in its stores that are sold to customers nationwide. Some of these products include smartphones, tablets, smartwatches, phone cases, etc. Verizon is able to capitalize on these popular items, generating huge profits. Not only does Verizon Wireless sell a wide variety of products but they also sell a reliable data plan to families all around the world. Verizon allows families to connect with each other across the globe for competitive prices. As a result, the development and sale of these coveted products and services are the main reasons for Verizon’s success worldwide.

In the first chart it shows the stable movement of Verizon’s stock throughout 1 year. Verizon’s stock price increased by 15% within 6 months. One article states, “the most important factor in Verizon’s increased valuation is its bet on 5G service… predicts that by the end of 2025, 5G internet will cover 65% of the world’s population” (Forbes.) This article shows that more people are investing into Verizon’s stock because of their plans to use a 5G service in the future. The company’s outspoken goal to establish a 5G network is responsible for Verizon’s 15% stock increase.

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For the 3 month chart, the stock increased as a result of the new AirPod Pro’s coming out from Apple. Many people decided to buy these which is why the stock mostly increased. In another article, it says, “Apple’s AirPods have dominated the holiday sales season and many of the best deals are still live” (Forbes.) During the past 3 months, the holiday season caused people to buy large amounts of this product which is why the stock increased during this 3 month period.

For the 1 day chart, it fluctuates mostly downward. According to this article, it states, “That 3% drop came as the broader S&P 500 was largely flat and the Dow Jones Industrial Average was up slightly” (Barron’s.) The Verizon stock decreased by 3% due to the slight increase of the Dow Jones Industrial Average and the S&P 500 being very stable. Since the Verizon is calculated in the Dow Jones Industrial Average, this influenced the stock to go down only by a small percentage.

Throughout the history of the holding company, Verizon has split six times. Verizon had stock splits in the following years; 1986, 1990, 1998, 2006, 2008, and 2010. Verizon used stock splits to increase the flow of their shares and to make their shares more affordable and comfortable to investors. Also, Verizon Wireless has paid 33 dividends from 2011 to 2019. Recently, Verizon has declared a quarterly dividend of 61.50 cents a share. Verizon paid out these dividends because they want to attract investors and increase shareholder value.

Verizon Wireless has many competitors in the telecommunications industry. Two of the major competitors are AT&T and T-Mobile. AT&T is Verizon’s most direct competitor. Verizon has around 150.1 million customers worldwide while AT&T is right behind them with 142 million customers. For T-Mobile, the company has some catching up to do since they only have 73 million customers. T-Mobile’s customer population is nearly half of AT&T’s which shows how dominant both Verizon and AT&T really are in the telecommunications industry. Throughout these past years, both of these companies have had fierce competition.

All three companies sell mostly the same products but different varieties of coverage. In addition, they are competing for the same customers which leads to major competition especially between Verizon and AT&T. At Verizon Wireless, they provide better service and speeds. On the other hand, at AT&T, they provide customers with great prices and better perks for joining than other companies. At T-Mobile, they have fast speeds but just a little slower than Verizon’s and also have cheap prices just like AT&T. In simpler terms, T-Mobile is a combination of the two. For the customers, they’re choices mostly depend on their own financial situation, the speed and service, and how many family members they have. 

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