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Will they come for Verizon CEO Hans Vestberg?
Hans Vestberg started his telecom career at network equipment giant Ericsson in the early 1990s. He worked his way up through the Swedish company’s ranks until, in 2010, he became the vendor’s first CEO who didn’t have a background in engineering.
But Ericsson ejected Vestberg in 2016 following a string of poor financial results and a slide in the company’s share price.
The second big phase of Vestberg’s telecom career started in 2017 when he joined Verizon, a massive, US-based network operator, to lead the company’s network and technology team. The move made sense considering Vestberg’s long history at what remains one of Verizon’s biggest equipment suppliers.
Then, just over a year later, Vestberg took over Verizon’s CEO slot from Lowell McAdam. It was a noteworthy development considering Verizon typically promotes from within its deep bench of “Big Red” veterans. Nonetheless, Vestberg was quick to make his mark on Verizon, reorganizing the company’s leadership team under the “Verizon 2.0” banner.
Vestberg’s remit at Verizon was clear: To lead the company into the 5G era. Vestberg outlined the broad strokes of his big 5G plan during a lengthy CES presentation in 2019. Verizon, he said, would eventually offer up eight “currencies” of 5G that would unlock all kinds of opportunities for the company specifically and the wider telecom market in general. Vestberg’s presentation coincided with the peak of the 5G hype cycle.
Today, though, things are much, much different.
Another bad quarter
“Verizon hits five-year low as slashed outlook points to no growth ahead,” reads one headline following Vestberg’s release of Verizon’s second quarter 2022 results. In a word, the company’s performance in the second quarter was bad – and it came after a similarly bad first quarter.
“Hans, I wonder as we think about growth, maybe we revisit some of the comments you have made over the past couple of years about 5G. As the market has evolved, what is your latest thinking about the opportunity?” asked longtime telecom financial analyst Craig Moffett, of MoffettNathanson, during Verizon’s quarterly conference call Friday.
In response, Vestberg pointed out that Verizon’s 5G-based fixed wireless access (FWA) business is progressing. But he acknowledged that profiting from 5G smartphones has been “a little bit more challenging.”
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“Get woke and go broke!” continues to be the truism that many CEOs and boards refuse to hear. Another note is not to assume that American consumers are interested in financing a European Union 5G fantasy. In this case “If you build it, paying customers might not come. Where is the value proposition for them?
It is interesting that the advent of Vestberg’s advancement at Verizon to push DEI, ESG , 5G and Globalism was also the decimation of the company’s embryonic OneFiber program, as well as the beginning of the decline of their once fabled network.
Craig Moffett the Cable loving sell-side analyst notes that while Verizon continues to charge a premium for their once fabled network that their network is no longer the best. This leaves the company’s leadership in a very awkward position, as many consumers have concluded that they can purchase the same Verizon services at a cheaper price, with better customer service from one of the many MVNO resellers that the company uses, like Xfinity.
Note the poster is a former 30 year retiree