In announcing its third-quarter earnings results recently, Verizon—as usual—attributed much of its success to its wireless unit. Fran Shammo, Verizon’s chief financial officer, noted that the reason Verizon Wireless leads the industry in the number of wireless customers is that it has always focused on its network.
“Scale is important,” he is quoted by The New York Times as saying. “But the network is the product here. This has been a long-term strategic investment for us.”
Knowing what its real product is and focusing on making it the best in the industry are two reasons Verizon Wireless excels. They also provide lessons for other companies wanting to lead their industries.
Even at the company’s founding in April 2000 (from a merger of Bell Atlantic and GTE, along with a few smaller operations) Verizon Wireless stressed the quality of its network. At that time, the company—or more correctly, perhaps, Denny Strigl, its strong CEO then and for the next several years—knew that no matter what brand or style of wireless phones customers used, they would not be happy if their calls did not go through. And, although many of us—especially those who live in or near large metropolitan areas—may have forgotten this fact, wireless coverage was for many years often very bad for much of the country’s cell phone users.
So, over the years, Verizon Wireless has focused on making sure its network—whether analog, 2G (the first generation digital wireless service, 3G (an updated digital service), or now 4G (the latest digital service known as LTE or Long Term Evolution)—has been as good as its technicians and billions of dollars could make it.
This focus is part of the reason why 79 percent of the phones purchased from the company during the third quarter were smartphones—a huge increase over its 25 percent goal only a few years ago. These phones suck data like candy, and they need a great network if they are to function flawlessly.
The lesson here, I think, is that a company must know what its real product is, and it must work to make it the best. In Verizon Wireless’ case, the product is its network. Other wireless carriers—those who trail their competitors and are looking for merger opportunities and funding injections to stay alive—may not see it that way. They might think their product is cheap service or phones, perhaps; or maybe they’re still not sure what it is, even after years of operation.
Verizon Wireless never stops improving its customer service and retail operations, or offering the best cell phones and wireless devices available. But it knows that while these aspects strengthen its business, it is its network that drives the company’s success.
Photo: Verizon Wireless