Verizon Pivots from Infrastructure to Entertainment Buy Up

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RingPlus News Service Los Angeles, April 20th, 2017 - It’s clear that Verizon’s massive infrastructure upgrades have pushed the #1 carrier even further above the competition. But what’s a robust telecom to do when it gets bored of bulking up its network and outpacing competition? The company is already set to buy up to 37.2 million miles of optical fiber and related hardware from Corning over the next few years. Verizon CEO Lowell McAdam appears to have his sights set on a variety companies, stating that pretty much any merger is possible, if you can convince him it’s a good deal. However, only media companies appear to be a good fit as no other companies are able to match Verizon’s progress in building network support. 

Verizon has already purchased AOL for $4.4 billion and is implementing the company’s email service for Verizon subscribers, further trimming down the telecom’s use of internal resources. Yahoo was purchased for $4.8 billion in a move to capitalize on the tech giants’ combined ad technology and mobile content. Verizon’s thirst for content to exploit its media companies may be only beginning.

One potential merger contender is Comcast, which boasts 145,000 miles of fiber across its 39-state territory. Comcast is a dominating force in the high-speed broadband market, a potentially complementary service that would take the pressure off Verizon’s aging DSL wireline network. Verizon is known for its strong hold on the mobile market. A merger between Verizon and Comcast would create a mega company that boasts 32 million Internet subscribers on the nation’s largest cable and mobile company. The merger would create a company with 9 million more subscribers than the next biggest provider, Charter. In addition to subscribers and network complements, Comcast owns TV programmers that could provide additional content for Verizon. Other potential mergers could star Walt Disney or CBS. The good news is that shares from all three mentioned companies rose on speculation of a potential merger with Verizon Tuesday.

Verizon’s foray into snapping up media companies is essential: for the first time, the behemoth lost subscribers, dragging shares down 1.5% on the news. Verizon is competing against creative new offerings from its competitors, such AT&T’s free HBO service for unlimited customers and T-Mobile’s unlimited Binge On service that satiates consumers’ ever growing desire to stream video content on their mobile devices. Reports from the latest quarter illustrate that the biggest, strongest network isn’t so special to customers if you have nothing exciting to offer over it.

 

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Sources:

https://arstechnica.com/information-technology/2017/04/verizon-ceo-wed-consider-merger-with-almost-anyone-including-comcast/

http://money.cnn.com/2015/05/12/investing/verizon-buys-aol/

http://www.mcall.com/business/tech/mc-verizon-email-users-must-switch-to-aol-20170414-story.html

http://money.cnn.com/2017/04/20/investing/verizon-wireless-earnings-subscribers/

https://www.t-mobile.com/offer/binge-on-streaming-video.html

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