Verizon's New CEO Embraces Change: Will Legacy Technologies Be Left Behind?
As Verizon prepares to release its earnings report for the fourth quarter and full year of 2025 at the end of January, the company finds itself at a pivotal juncture. Recent statements from new CEO Dan Schulman indicate a significant shift in strategy aimed at prioritizing customer satisfaction over pure profit. This shift raises questions about the future of certain legacy technologies within the organization, particularly as Verizon navigates the competitive landscape with rivals such as T-Mobile. While the focus may be shifting, there are concerns that the company could phase out impressive technologies lacking in profitability.
Shifting Toward a Customer-First Approach
Taking the reins from Hans Vestberg in October, Schulman has articulated his vision for a "customer-first culture." He stressed the need for Verizon to embrace bold and financially astute strategies that transform the company's trajectory. This transition signals a significant turnaround for a company that has historically been more concerned with its profit margins than customer relationships.
Verizon's initial expectation was that the upgrade to 5G would mainly be driven by business clients moving from 4G LTE for enhanced speed. However, with the advent of consumer-driven demand for better mobile experiences and the loss of postpaid phone subscribers to competitors, it has become evident that a more customer-friendly approach is essential.
Raymond James Projects Cost-Cutting Measures
Investment firm Raymond James regards Verizon as a solid telecom investment, recently maintaining an Outperform rating on its stock, which currently trades at approximately $40.47, offering a 6.82% dividend yield. However, analysts foresee the need for Verizon to trim expenses to fund new customer acquisition strategies. This may include reducing or completely eliminating legacy programs such as Mobile Edge Compute (MEC), Internet of Things initiatives, and Private Networks.
Is MEC on the Chopping Block?
Raymond James suggests Verizon will cut back on spending for MEC, branded as Verizon 5G Edge. This technology, designed for ultra-low latency by relocating data processing closer to the user, may be too ambitious given the slow adaptation of many businesses to fully leverage its benefits. Coupled with a recent substantial layoff of approximately 13,000 employees—significantly impacting the 5G Acceleration (5GA) team—MEC's future appears shaky.
A Leaner, More Agile Verizon
As Verizon aims to adopt a leaner and more resourceful operational model, it appears to be transitioning away from large-scale projects like MEC. Instead, the focus will shift toward increasing efficiency through AI-driven customer service and automation as the company seeks to reduce operational costs associated with maintaining its 5G network.
Moreover, with the recent $20 billion acquisition of Frontier, Verizon will have to navigate a heavy debt load, prompting further cost management. This new strategy, led by Schulman, focuses on fostering customer loyalty while streamlining tech investments to stay competitive in a rapidly changing market.
