Verizon Communications Stock

Verizon Communications Inc., through its subsidiaries (Verizon), provides communications, technology, information and entertainment products and services to consumers, businesses and government entities. With a worldwide presence, the company offers data, video and voice services and solutions on its networks and platforms that are designed to meet customers’ demand for mobility, reliable network connectivity, and security.

Segments

The company operates through two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business).

Verizon Consumer Group

Consumer segment provides consumer-focused wireless and wireline communications services and products. The company’s wireless services are provided across one of the most extensive wireless networks in the United States (U.S.) under the Verizon family of brands and through wholesale and other arrangements. The company also provides fixed wireless access (FWA) broadband through its fifth-generation (5G) or fourth-generation (4G) Long-Term Evolution (LTE) networks as an alternative to traditional landline internet access. The company’s wireline services are provided in nine states in the Mid-Atlantic and Northeastern U.S., as well as Washington D.C., over its 100% fiber-optic network through its Verizon Fios product portfolio and over a traditional copper-based network to customers who are not served by Fios.

As of December 31, 2023, Consumer had approximately 115 million wireless retail connections (including FWA), of which 82% are postpaid connections. In addition, at December 31, 2023, Consumer had approximately 9 million total broadband connections (which includes Fios internet, Digital Subscriber Line (DSL) and FWA connections), and approximately 3 million Fios video connections.

Verizon Business Group

Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and conferencing services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various Internet of Things (IoT) services and products. The company provides these products and services to businesses, government customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world.

Service and Product Offerings

The company’s Consumer segment's wireless and wireline products and services are available to its retail customers, as well as resellers that purchase wireless network access from it on a wholesale basis. The company’s Business segment’s wireless and wireline products and services are organized by the primary customer groups targeted by these offerings: Enterprise and Public Sector, Business Markets and Other, and Wholesale.

Wireless

The company offers wireless services and equipment to both Consumer customers and Business customers.

Wireless Services

The company’s Consumer and Business segments provide a wide variety of wireless services accessible on a broad range of devices. Customers can obtain the company’s wireless services on a postpaid or prepaid basis. Retail (non-wholesale) postpaid accounts primarily represent retail customers that are directly served and managed by Verizon and use Verizon branded services. A single account ay include monthly wireless services for a variety of connected devices. The company’s postpaid service is generally billed one month in advance for a monthly access charge in return for access to and usage of network services. The company’s prepaid service is offered only to Consumer customers and enables individuals to obtain wireless services without credit verification by paying for all services in advance. As of December 31, 2023, the company had 94 million postpaid connections and 21 million prepaid connections, representing approximately 82% and 18% of its Consumer wireless retail connections, respectively.

Access to the internet is available on all smartphones and nearly all basic phones. In addition, the company’s customers can access the internet at broadband speeds on notebook computers, tablets and smartwatches that are either wireless-enabled or that are used in conjunction with separate dedicated devices that provide a mobile Wi-Fi connection.

Historically, customers on the company’s fixed-term service plans paid higher access fees for their wireless service in exchange for the ability to purchase their wireless devices at subsidized prices. The company continues to offer subsidized plans to its Business customers.

The company also provides FWA broadband through its 5G or 4G LTE wireless networks to its Consumer and Business customers. FWA enables fixed broadband access using radio frequencies instead of cables and can be used to connect homes and businesses to the internet. As of December 31, 2023, the company had approximately 3.1 million FWA broadband connections.

Wireless Equipment

Consumer and Business offer several categories of wireless equipment to customers, including a variety of smartphones and other handsets, wireless-enabled internet devices, such as tablets, and other wireless-enabled connected devices, such as smart watches. The company permits customers to acquire equipment from it using device payment plans, which permit the customer to pay for the device in installments over time.

Verizon Consumer Group

In addition to the wireless services and equipment, the Consumer segment sells residential fixed connectivity solutions, including internet, video and voice services, and wireless network access to resellers on a wholesale basis. Consumer also provides non-connectivity services, including device protection, content offerings, cloud storage, and other products.

Residential Fixed Services: The company provides residential fixed connectivity solutions to customers over its 100% fiber-optic network through its Verizon Fios product portfolio and over a traditional copper-based network to customers who are not served by Fios. In addition, the company provides FWA broadband through both 5G and its LTE Home Internet offerings, which are available in most states across the U.S.

The company offers residential fixed services tailored to the needs of its customers. Depending on those needs at a particular time, the company’s services may include features related to, among other things: internet access at different speed tiers using fiber-optic, copper or wireless technology; video services that may feature a variety of channel options, video on demand products, cloud-based services and digital video recording capabilities; over-the-top (OTT) video services; voice services; and other home solutions.

Network Access Services: The company sells network access to mobile virtual network operators (MVNOs) on a wholesale basis, who in turn resell wireless service under their own brand(s) to consumers.

Verizon Business Group

In addition to the wireless services and equipment, the company’s Business segment provides wireless and wireline communications services and products, including data, video and conferencing services, corporate networking solutions, security and managed network services, local and long distance voice services and network access to deliver various IoT services and products.

Enterprise and Public Sector

Enterprise and Public Sector offers wireless products and services, as well as wireline connectivity and managed solutions to the company’s large business and government customers.

Enterprise and Public Sector offers a broad portfolio of connectivity, security and professional services designed to enable the company’s customers to optimize their business operations, mitigate business risks and capitalize on data. These services include the following:

Network Services: The company offers a portfolio of network connectivity products to help its customers connect with their employees, partners, vendors and customers. These products include private networking services, private cloud connectivity services, virtual and software defined networking services and internet access services.

Advanced Communications Services: The company offers a suite of services to its customers to help them communicate with their employees, partners, vendors, constituents and customers. These products include Internet Protocol (IP)-based voice and video services, unified communications and collaboration tools and customer contact center solutions.

Security Services: The company offers a suite of management and data security services that help its customers protect, detect and respond to security threats to their networks, data, applications and infrastructure.

Core Services: The company provides a portfolio of domestic and global voice and data solutions utilizing traditional telecommunications technology, including voice calling, messaging services, conferencing, contact center solutions and private line and data access networks. Core services also include the provision of customer premises equipment, and installation, maintenance and site services.

IoT Services: The company provides the network access required to deliver various IoT products and services. The company works with companies that purchase network access from it to connect their devices, bundled together with their own solutions, which they sell to end users. The company is building IoT capabilities by leveraging business models that monetize usage on its networks at the connectivity, platform and solution layers.

Business Markets and Other

Business Markets and Other offers wireless services and equipment, conferencing services, tailored voice and networking products, Fios services, advanced voice solutions and security services to businesses that ordinarily do not meet the requirements to be categorized as Enterprise and Public Sector. Business Markets and Other also includes solutions that support mobile resource management.

In addition to the wireless services and equipment, Business Markets and Other provides fixed connectivity solutions comparable to the residential fixed services provided by Consumer, as well as business services and connectivity similar to the products and services offered by Global Enterprise, in each case with features and pricing designed to address the needs of small and medium businesses.

Wholesale

Wholesale offers wireline communications services, including data, voice, local dial tone and broadband services primarily to local, long distance, and wireless carriers that use the company’s facilities to provide services to their customers. Wholesale's services include:

Data Services: The company offers a portfolio of data services to enhance its Wholesale customers’ networks and provide connections to their end users and subscribers.

Voice Services: The company provides switched access services that allow carriers to complete their end-user calls that originate or terminate within its territory. In addition, the company provides originating and terminating voice services throughout the U.S. and globally utilizing its time-division multiplexing and Voice over Internet Protocol (VoIP) networks.

Local Services: The company offers an array of local dial tone and broadband services to competitive local exchange carriers, some of which are offered to comply with telecommunications regulations. In addition, the company offers services such as colocation, resale and unbundled network elements in compliance with applicable regulations.

Distribution

The company uses a combination of direct, indirect and alternative distribution channels to market and distribute its products and services to Consumer and Business customers.

The company’s direct channel, including company-operated stores, is a core component of its distribution strategy. The company’s sales and service centers and business direct sales teams also represent significant distribution channels for its services. In addition, the company has a robust digital channel and omni-channel as a part of the customer experience in order to offer choice and convenience.

The company’s indirect channel includes agents that sell its wireless and wireline products and services at retail locations throughout the U.S., as well as through the internet. The majority of these sales are made under exclusive selling arrangements with the company. It also has relationships with high-profile national retailers that sell its wireless and wireline products and services, as well as convenience store chains that sell its wireless prepaid products and services.

In addition to its direct channel, the company’s Business segment has additional distribution channels that include business solution fulfillment provided by resellers, non-stocked device fulfillment performed by distributors and integrated mobility services provided by system integrators and resellers.

Global Network and Technology

The company’s global network architecture is used by Consumer and Business. The company’s network technology platforms include both wireless and wireline technologies.

Network Evolution

The company is transforming the architecture of its networks into its next-generation multi-use platform, which it calls the Intelligent Edge Network. This technology enhances applications by hosting them at the end of the network, closer to devices and end points, which lowers response time and boosts performance.

5G

Over the past several years, the company has been leading the development of 5G wireless technology industry standards and the ecosystems for fixed and mobile 5G wireless services. 5G technology enables higher throughput and lower latency than 4G LTE technology and allows its networks to handle more traffic as the number of internet-connected devices grows.

The company provides high quality 5G wireless service utilizing millimeter wave and C-Band spectrum. Other licensed spectrum bands are used to support the company’s 5G service. In January 2022, the company began rapidly deploying its C-Band spectrum, which, as of December 31, 2023, covered approximately 242 million people in the U.S. The company obtained full access to its C-Band spectrum in August 2023 and will continue deploying this spectrum across the continental U.S. The company’s FWA broadband services also leverage the 5G network and its expanding C-Band footprint, in addition to its 4G FWA offerings.

4G LTE

The wireless network technology platform that carries about half of the company’s wireless traffic is 4G LTE. As of December 31, 2023, the company’s 4G LTE network covered approximately 330 million people, excluding those in areas served by its LTE in Rural America partners. Under this program, the company has collaborated with wireless carriers in rural areas to build and operate a 4G LTE network using each carrier’s network assets with its core 4G LTE equipment and 700 Megahertz (MHz) C Block and Advanced Wireless Services (AWS) spectrum. LTE Home Internet, its home broadband internet service leverages the Verizon 4G LTE network.

Wireless Network Reliability and Build-Out

The company considers the reliability, speed, capacity and coverage of its wireless network to be key factors for its continued success. As the company designs and deploys its network, it focuses on the number of successful data sessions the network enables, delivering on its advertised throughput speeds, and the number of calls that are connected on the first attempt and completed without being dropped. The company utilizes three strategies to maintain the quality of its network: increasing the density of its network elements, deploying new technologies as they are developed and putting additional wireless spectrum into service.

The company is densifying its networks by utilizing macro and small cell technology, in-building solutions and distributed antenna systems. Network densification enables it to add capacity to address increasing mobile video consumption and the growing demand for IoT products and services on its 4G LTE and 5G networks. The company is also utilizing existing network capabilities to handle increased traffic without interrupting the quality of the customer experience. The company continues to deploy advanced technologies to increase both network capacity and data rates.

In order to deploy its 5G network and build and upgrade its existing 4G LTE network, the company must secure rights to a large number of sites and obtain zoning and other governmental approvals and fiber facilities for its macro and small cells, in-building systems and antennas and related radio equipment that comprise distributed antenna systems. The company has relationships with a wide variety of vendors that supply various products and services that support its wireless network operations. The company utilizes tower site management firms as lessors or managers of a portion of its existing leased and owned tower sites.

The company’s networks in the U.S. include various elements of redundancy designed to enhance the reliability of the services provided to its customers. To mitigate the impact of power disruptions on its operations, the company has battery backup at every switch and every macro cell. The company also utilizes backup generators at a majority of its macro cells and at every switch location. In addition, the company has a fleet of portable backup generators that can be deployed if needed. The company further enhances reliability by using a fully redundant Multiprotocol Label Switching backbone network in critical locations.

In addition to its own network coverage, the company has roaming agreements with a number of wireless service providers to enable its customers to receive wireless service in nearly all other areas in the U.S. where wireless service is available. The company also offers a variety of international wireless voice and data services to its customers through roaming arrangements with wireless service providers outside the U.S.

Fios

While deployed initially as a consumer broadband network, the company’s PON infrastructure is also experiencing more widespread application in the Business segment, especially as businesses increasingly migrate to Ethernet-based access services.

Global IP

Verizon owns and operates one of the largest global fiber-optic networks in the world, providing connectivity to Business customers in more than 190 countries. The company’s global IP network includes long-haul, metro and submarine assets that enable and support international operations.

Global business is rapidly evolving to an everything-as-a-service model in which Business customers seek cloud-based, converged enterprise solutions delivered securely via managed and professional services. The company is continuing to deploy packet optical transport technology in order to create a global network platform to meet this demand.

Spectrum

The spectrum licenses the company holds can be used for mobile and fixed wireless voice, video and data communications services. The company is licensed by the Federal Communications Commission (FCC) to provide these wireless services on the following low and mid-band spectrum in areas that collectively cover nearly all of the population of the U.S.: the 700 MHz Upper C block, Cellular spectrum (850 MHz), Personal Communication Services (PCS) spectrum (1900 MHz), AWS 1 and AWS 3 bands (1700 MHz uplink and 2100 MHz downlink), and the 3.7 GHz band (C-Band). The company also holds spectrum licenses in the 28, Upper 37 and 39 GHz bands, known as millimeter wave spectrum, and utilize both Priority Access Licenses (PALs) and General Authorized Access (GAA) in the 3.5 GHz band (Citizens Broadband Radio Service).

The company uses its low and mid-band spectrum to provide wireless services. Millimeter wave spectrum is used to provide, or increase capacity for, mobile and fixed wireless services in areas of high demand. The company utilizes DSS technology to allow 5G service to run simultaneously with 4G LTE on multiple spectrum bands. With DSS, whenever customers move outside Verizon’s millimeter wave and C-Band coverage areas, their 5G-enabled devices will remain on 5G technology using the lower spectrum bands where this network is available.

The company anticipates that demand for spectrum will continue to increase over time, driven by growth in customer connections and the increased usage of wireless broadband services that use more bandwidth and require faster rates of speed, as well as the wider deployment of 5G mobile and fixed services.

Competition

With respect to its wireless connectivity products and services, the company competes against other national wireless service providers, including AT&T Inc. and T-Mobile US, Inc., as well as various regional wireless service providers. The company also competes for retail activations with resellers that buy bulk wholesale service from wireless service providers, including Verizon, and resell it to their customers. Resellers include cable companies, such as Comcast Corporation and Charter Communications, Inc., and others.

Regulatory Trends

Some of the company’s competitors are subject to fewer regulatory constraints than Verizon. For many services offered by Verizon, the FCC is the company’s primary regulator. The FCC regulates several aspects of the company’s wireless operations. The FCC has jurisdiction over interstate telecommunications services and other matters under the Communications Act of 1934, as amended (Communications Act or Act). Other Verizon services are subject to state and local regulation.

History

The company was incorporated in 1983 under the laws of the state of Delaware. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in 2000.