Verizon recently appointed Daniel Schulman as its new CEO, signaling a strategic shift from prioritizing network superiority to enhancing customer satisfaction, according to The Wall Street Journal. However, despite the pressing demand from customers for more affordable plans, Verizon is not rushing to reduce its prices.
Verizon at a Crossroads
The Wall Street Journal highlights Schulman’s selection amidst Verizon’s ongoing struggles with customer retention. The company witnessed a decline in its subscriber base over the first two quarters of the year and anticipated continued losses in Q3. In response, Verizon’s board appointed Schulman, then serving as a director, as CEO in October. Concurrently, board member Mark Bertolini was named chairman, aiming to steer the company toward renewed growth.
Schulman is determined to implement significant changes, including difficult decisions such as a workforce reduction impacting approximately 15,000 of Verizon’s 100,000 employees. The new leadership intends to cut bureaucracy and cultivate a customer-centric culture, moving away from the traditional emphasis on network engineering. It’s notable that Verizon no longer holds an uncontested lead in network quality, a fact acknowledged by chairman Bertolini.
“I’m not afraid at this point in my life to make really hard decisions.”
The Pricing Challenge
Verizon remains the priciest carrier in the U.S. market. Historically, its premium pricing was justified by a clear edge in network performance. But as competitors such as AT&T, T-Mobile, and various cable providers introduce affordable plans, Verizon’s premium charges have become a liability. The company had hoped that high-value customers would offset losses caused by frequent price hikes. Unfortunately, the reality of three consecutive quarters of subscriber decline shows that strategy is unsustainable.
Can Promotions Offset Premium Prices?
Current voting results (421 votes):
- Yes: 7.36%
- No: 63.66%
- Only if they are high-value: 28.98%
Addressing Verizon’s Core Issues
Verizon faces three critical challenges: the erosion of its network’s top position, declining customer service quality, and its elevated pricing structure. To combat these issues, Verizon has launched various offers to attract and retain customers. However, whether these incentives can sufficiently counterbalance high prices remains uncertain.
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