Verizon aims to cut costs as profits shrink

Verizon CEO

Verizon CEO Hans Vestberg (pictured) laid out details of a cost-cutting program to reduce annual spending by between $2 billion and $3 billion by 2025, part of efforts to address the effects of inflation among other goals.

He used the operator’s third-quarter earnings call to note that the program was focused on several business areas, including digitization efforts to improve the customer experience and streamlining internal operations through automation and process improvements.

“While some of this will benefit the bottom line, some of the savings will be reinvested in the business to help accelerate opportunities,” he said.

CFO Matt Ellis explained that the first step for the initiative was a recently formed Verizon Global Services“part of a larger program to leverage cross-functional opportunities across the business”.

Verizon’s postpaid user base declined by 189,000 year-over-year in the third quarter, attributed to higher prices introduced earlier this year, Vestberg and Ellis said it boosted earnings.

Recon Analytics analyst Roger Entner noted that it was the third consecutive quarter of net subscriber losses for Verzion’s consumer unit. Mobile World Live the fact that the carrier’s rate hikes were about twice the level AT&T implemented pointed to “more underlying issues.”

Net additions for postpaid phones for Verizon Business totaled 197,000, with revenue up 1.9 percent to $7.8 billion.

“Verizon is now the leader in wireless churn,” he added.

Wireless services revenue of $19 billion increased 10 percent, primarily due to the company’s owned by Tracfone.

Vestberg stated that the company was on track to cover 200 million people with C band in Q1 2023, up from 160 million today. The cost of the expansion in the first nine months was $4.5 billion: Ellis noted that the total investment cost of the move is $10 billion.

Verizon reported 108,000 fixed wireless access net addition in the third quarter, with more than 40 million households covered.

Net income attributable to Verizon fell 23.5 percent to $4.9 billion, on revenue of $34.2 billion, up 4 percent.

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