Verizon targets IoT and mobile video growth

Giant US operator Verizon reported Q1 2016 numbers broadly in line with analyst consensus, although revenues fell a bit short, pushing its shares down 3% at time of writing.

Verizon added 640,000 retail postpaid subscribers but lost 177,000 of the less valuable prepaid (PAYG) variety, averaging around 1% churn across both. 107,171 of Verizon’s 112,573 total connections are postpaid and 81% of postpaid subscribers are now on LTE, compared to 70% a year ago.

“Verizon’s strong first-quarter results demonstrate our capacity to compete effectively, while executing on our plan of continued network leadership and seeding new growth markets in mobile video and the Internet of Things,” said Chairman and CEO Lowell McAdam.

The Q1 announcement comes in the middle of a busy time for Verizon. It recently announced a joint venture with Hearst to acquire Complex Media, which targets the young male adult market. On top of that it’s considered the front-runner to buy much of Yahoo, to add to its content and advertising built around the acquisition of AOL.

Here’s a diagram summarizing Verizon’s diversification strategy. It’s pretty standard stuff: target growth in new areas while keeping the legacy stuff ticking along. A bit Like Ericsson’s strategy.

Right now there doesn’t seem to be much substance to Verizon’s IoT ambitions, but it is active in things like connected cars and it has shown it’s not afraid to splash the cash in the name of strategy. In the short term Verizon’s fixed line operations have some industrial action to deal with but expect the company to continue to invest over the course of the year.