Business

Verizon names chief technology officer as new CEO

FILE PHOTO: Hans Vestberg, Verizon executive vice president and president of Global Networks and Chief Technology Officer, responds to a question during a panel discussion on 5G wireless broadband technology during the 2018 CES in Las Vegas, Nevada, U.S. January 10, 2018. (REUTERS/Steve Marcus/File Photo)
FILE PHOTO: Hans Vestberg, Verizon executive vice president and president of Global Networks and Chief Technology Officer, responds to a question during a panel discussion on 5G wireless broadband technology during the 2018 CES in Las Vegas, Nevada, U.S. January 10, 2018. (REUTERS/Steve Marcus/File Photo)

Verizon announced Friday that it is tapping a technology expert and recent newcomer to replace its longtime chief executive, who is retiring later this year.

The move signals the company may be sharpening its focus on developing faster, more reliable networks as it tries to set itself apart in a more competitive telecommunications landscape.

Hans Vestberg, the company’s top technology officer, will take the reins starting in August. The current chief executive of seven years, Lowell McAdam, 64, will stay on as executive chairman through the end of the year.

Vestberg, 52, joined the wireless provider last year and has been working on Verizon’s networks, including the 4G LTE network. Before joining Verizon, he worked at the networking and telecommunications company Ericsson, where he served six years as chief executive and president and also was chief financial officer.

Verizon tapped a technology expert as it races against other wireless carriers to develop a 5G network that would deliver faster speeds. McAdam alluded to that goal in a letter he sent to employees Friday morning.

“As I think about the power of 5G, I am convinced that this is a significant and pivotal time for Verizon and our entire industry — and now is the time to bring Verizon into its next chapter,” he wrote.

Verizon has typically relied on a strong wireless network to grow its customer base, but that strategy has faltered recently as competitors, such as T-Mobile, have improved their service and reputation with customers, said BTIG analyst Walt Piecyk.

ARTICLE CONTINUES BELOW ADVERTISEMENT

“There are number of different ways Hans Vestberg could reshape Verizon’s future,” Piecyk said, adding that Verizon and other communications companies are “facing new competition and disruption to their existing business models.”

Verizon announced its succession plan less than a week before a judge is expected to rule on a merger between AT&T and Time Warner. Depending on the outcome, the case may encourage Vestberg to grow the company through the acquisition of a media company, a strategy the wireless carrier has mostly avoided in the past.

One of the most notable deals Verizon completed under McAdam was the $130 billion buyout of Vodafone’s wireless business in 2014. Under McAdam’s leadership, Verizon also acquired Yahoo and AOL. Verizon’s stock price was up 36 percent under McAdam’s tenure through Friday’s close.

Vestberg has been considered a potential successor to McAdam since he joined the company in April 2017, said Jason Schloetzer, a business professor at Georgetown University who studies corporate governance.

The new CEO is a relative outsider when compared to his predecessors, who had spent more time at the company before they took on the top executive role, Schloetzer said. But Vestberg will be helped by his technical expertise and his previous experience running Ericsson.

Vestberg oversaw more than 115,000 employees at Ericsson while the company shifted from a hardware provider to one that emphasized software and services. He was ousted from the company in 2016 under pressure from investors who were disappointed by poor returns, according to reports.

In a video conversation between the two executives that was shared with Verizon employees, Vestberg said he would continue to work with McAdam as he became more familiar with the commercial side of the business. “I’m going to continue the work with the leadership team and the strategy we have,”Vestberg said.

A spokesman for Verizon said Vestberg and his family will move from Sweden to New Jersey, where the company’s executives are based.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.