Verizon to Break Up Wireless Unit in Reorganization

The Wall Street Journal

New CEO Hans Vestberg restructures divisions based on types of customers served

Verizon Communications Inc.’s new chief executive is restructuring the carrier’s business lines, including its massive wireless business, in one of the first major organizational changes under his leadership.
Hans Vestberg is reorganizing the company’s divisions by the types of customers served, rather than by the type of service provided, the company said Monday.
“The customers will actually have access to all the assets we have,” including 4G and faster 5G wireless, broadband and wireline service, Mr. Vestberg said of the changes in an interview.
Ronan Dunne, 55 years old, currently group president of Verizon Wireless—the firm’s biggest unit—will now lead the new Verizon Consumer Group. That new division includes consumer-focused wireless and wireline service.
Tami Erwin, 54, who is currently executive vice president of wireless operations, will lead a new business-focused unit. That division, called Verizon Business Group, will include wireless and wireline services for businesses and enterprises, including small and medium-size businesses and government contracts. She will also oversee Verizon’s telematics business.
The changes are a promotion for Ms. Erwin, a company veteran who started her career as a wireless customer-service representative and rose within the company to hold several senior positions.
A new unit, called Global Network and Technology, will be led by Kyle Malady, 51, who is now chief technology officer. Guru Gowrappan, the 38-year-old leader of Verizon’s digital media and advertising unit, will head a newly formed media group that houses Oath.
Mr. Vestberg, who was previously the chief executive of Ericsson AB, became chief executive on Aug. 1, succeeding Lowell McAdam.
He has led a companywide push to cut costs and has made building a faster, 5G, network the center of the carrier’s strategy.
The changes will take effect in January and Verizon will change the way it reports its financial performance in the second quarter.
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The wireless business accounted for $23 billion of the company’s $32.6 billion in third-quarter revenue.
Verizon’s purchase of Vodaphone PLC’s 45% stake in Verizon Wireless in 2014 helped paved the way for the changes, Mr. Vestberg said, because it gave the carrier full control of the wireless business.
While Verizon’s rivals have pursued large deals to transform their businesses in recent years, the largest U.S. wireless carrier by subscribers has opted instead to focus primarily on building a faster network.
Large U.S. carriers haven’t yet articulated how they will charge customers for 5G service in the coming years, but some analysts say the faster service could be an opportunity to generate new revenue.
“We would not be surprised to see more, higher-usage plans introduced as 5G comes along, offering higher price points for the customers who want the best service,” JPMorgan Chase& Co. analysts wrote in a note after meeting with top Verizon executives Friday.
Write to Sarah Krouse at sarah.krouse@wsj.com Corrections & Amplifications  Hans Vestberg is the chief executive of Verizon Communications. An earlier version of this article incorrectly misspelled his last name Mr. Vestburg. (Nov. 5, 2018)