Verizon Communications has named Ericsson former CEO Hans Vestberg as the next CEO and the successor to Lowell McAdam.
The appointment of Hans Vestberg indicates that the key strategy of Verizon, the number one telecom operator in the U.S., will be in the building up of 5G, the next-generation of wireless network and not expanding into media content, Reuters reported.
John Stratton, Verizon’s president of global operations, was expected to succeed current Lowell McAdam, according to analysts.
Verizon said John Stratton, 57, will retire from Verizon by the end of 2018. John Stratton will step down from his current role immediately, and will support a transition as an advisor to Lowell McAdam.
Hans Vestberg said in an interview the No. 1 U.S. wireless carrier would keep pursuing its current 5G strategy but he did not “see anything new on the horizon” to pursue media content.
Verizon Wireless is going through a tough phase at present. Hans Vestberg as the CEO of Ericsson could not revive the Sweden-based telecom network company despite exploring opportunities to grow bigger and lower cost. Some analysts feel that Verizon needs new business streams to revive the growth.
In fact, Hans Vestberg joined wireless operator Verizon after a one-year break after being fired in an investor-driven shakeup at Ericsson in 2016, following years of dismal growth and weak earnings.
The unexpected appointment of Hans Vestberg indicates that Verizon may not acquire a media / content company to rival AT&T.
The second largest telecom operator AT&T is currently awaiting a court decision on whether it can proceed with its plan to buy media company Time Warner to bring cost effective content to wireless subscribers as part of the strategy to enhance ARPU.
What will assist
Hans Vestberg is currently the executive vice president and president of Global Networks and chief technology officer of Verizon. Hans Vestberg, who has left as the CEO of Ericsson during a crisis period, joined Verizon in April 2017.
Years of experience at Ericsson will assist Hans Vestberg to select the best technology cost effectively for Verizon, keeping better margins for further growth. Hans Vestberg needs to prove himself by identifying new business opportunities for managing the growth at Verizon.
Present responsibilities of Hans Vestberg, 52, include developing the strong architecture for Verizon’s fiber-centric networks, including 4G LTE network, 5G deployment in the U.S., residential fiber network, and a global internet backbone and undersea cable network with massive investment.
Hans Vestberg, according to media reports earlier, was also considered for the CEO position at software giant Microsoft before the US-based technology company finalized Sathya Nadella.
Lowell C McAdam, 64, will serve as executive chairman of till his retirement from the global telecom operator at the end of the year and non-executive chairman post retirement, said Verizon, in a statement. Verizon named McAdam as CEO on August 1, 2011, and chairman on January 1, 2012.
The presence of Lowell C McAdam will assist Hans Vestberg to steer the growth of Verizon and bring new business.
Verizon under Lowell McAdam
# Revenue growth struggled
# $120 billion in capital investments
# Strong focus on IoT
# Acquisition of AWS, Straight Path and other spectrum
# M&A strategy focused on wireless, media and broadband
# Bought Vodafone’s 45% stake in Verizon Wireless for $130 bn
# Acquired AOL, Yahoo, XO Communications
# Bought optical fiber from Corning
# Sold wireline, tower and data center operations
The board of Verizon is happy about the contribution of Hans Vestberg and believes that he can take Verizon to the next level at a time when T-Mobile and Sprint are combining their businesses to take on Verizon and AT&T.
Hans Vestberg earlier served for six years as president and CEO of Ericsson that provides 35 percent of the world’s 2G, 3G and 4G mobile network infrastructure.
Hans Vestberg led more than 115,000 employees as Ericsson transformed from a focus on hardware to software and services. During his tenure, Ericsson could not make huge deals in line with Nokia, the telecom equipment maker from Finland. Nokia could acquire rival Alcatel-Lucent and compete strongly against Huawei and Ericsson.
During his tenure as CEO, McAdam strategically positioned Verizon for next-generation growth.
Since 2011 Verizon Communications made more than $120 billion in capital investments, in addition to AWS, Straight Path and other spectrum purchases, to enhance its mobile networks, while pursuing an M&A strategy focused on wireless, media and broadband services.
Verizon said he led the acquisitions of major media, fiber and telematics assets, including AOL, Yahoo, XO Communications and optical fiber from Corning as well as divestment of wireline, tower and data center operations.
Baburajan K
