Verizon Wireless of
Verizon Communications Inc.
) has once again proven its mettle as a quality wireless network
provider, reinforcing its growing infrastructural strength.
In a wireless network quality study conducted by J.D. Power in
the Northeast region, which includes Massachusetts, Connecticut,
Maine, New Hampshire, New York, Rhode Island and Vermont, Verizon
ranked highest among other national wireless service operators.
We believe the company's leading performance metrics in the
wireless business are accretive to its subscriber base and offers a
competitive advantage over its peers.
Early this year, Verizon also topped the RootMetrics network
performance study, in which it scored 89.7 on a scale of 100 for
its network speed, call quality, and data and text messaging
services. Wireless service providers like AT&T Inc. (
), Sprint Corp. (
) and T-Mobile US Inc. (
), who were also a part of this study, also fared well in terms of
Verizon has a strong foothold in the wireless business and
continues to capture additional market share via robust deployment
of the 4G Long Term Evolution (LTE) network. This leads to improved
operating and capital efficiency. The company is leading the
industry in terms of 4G deployment.
However, while Wireless continues to outperform, the Wireline
business still continues to be a drag on Verizon's financials. The
company's wireline division is struggling with persistent losses in
access lines as a result of competitive pressure from
voice-over-Internet protocol (VoIP) service providers and
aggressive triple-play (voice, data, video) offerings by cable
companies. These are weighing on the company's revenues and
In order to make itself profitable, Verizon is making
significant investments and is streamlining its cost structure. It
remains unclear if and when a reasonable return can be achieved
from such investments. Further, Wireline revenue trends would
remain challenged over the next couple of quarters due to the
company's actions to improve profitability. Product rationalization
and process simplification initiatives would also dilute profits in
the short term.
Verizon currently has a Zacks Rank #3 (Hold).
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