The telecommunications industry is one that attracts huge profits as it is an industry that is necessary for the daily lives of people. As such, people need to communicate on a regular basis using different media. In the contemporary world, the use of the internet is one that has taken the telecommunications industry by storm. In that, the companies providing communication services strive to ensure that they include wireless data provision in their services. This has ideally raised the bar of competition between the companies. In this regard, the largest telecommunications provider in the United States of America continues to face stiff competition from other smaller businesses that prove to place the needs of the consumers before the name of the brand. Verizon Wireless, as the highest and largest communications provider and thus requires upgrading its methods and strategies in the market to retain its relevance and client loyalty.
Verizon Wireless stands as the biggest telecommunications network in the United States of America. Therefore, this automatically translates to the large customer base for the company. The company began as a joint venture between Vodafone that is British and American telecommunications company, Bell Atlantic. Verizon came to be in the year 2014 after purchasing Vodafone’s stake in the enterprise. Serving the entire United States, Verizon Wireless records high profits in its operations. The profitability of the business arises from the fact that it provides fast and reliable 4G LTE network. In the modern world, speed and reliability are mandatory requirements in the communications industry. The company over its existence has acquired several other telecommunication businesses and assets as well such as the Virginia Wireless whereby, the company enjoys the profitability of being a part of a less congested network.
The company, despite being the leading telecommunications service provider in the U.S.A, it has faced severe losses in the year ended December 31, 2016. From its inception as the largest communications provider in the year 2014, the company’s figures regarding gross profit margins, operating profit margins, net profit margins, return on equity and return on assets showed great upscale movement as the company acquired more clientele. However, the financial year ending December 31, 2016 saw the company record losses in the different economic aspects that rendered its performance below par as compared to the year ended December 31, 2014.
Verizon Wireless operates with the 4G LTE network that also offers data services for its customers. The availability of the data services means that consumers can access the internet easily via their devices. However, the specifications of the data provided are subject to the type of mobile device OS. This is such that, the charges that apply for those who use iPhones may differ slightly from those who use Android phones. Verizon’s major competitors are T-Mobile and Sprint. Growth in the densely saturated market is not particularly assured; thus, the companies tend to come up with new strategies to draw more clients to using their services. As such, the internet being a crucial factor in communication in the modern world, wireless provision of data becomes of central importance to the service providers. Following the launch of the iPhone 7 mobile smartphone, Sprint and T-Mobile provided the customers with better deals on Apple’s newest devices which comprised of charging lower data costs as compared to Verizon (Pressman, 2016). The provision of cut prices on the unlimited data plans and iPhone 7 offers, both T-Mobile and Sprint were able to record higher returns as compared to Verizon. Rather than responding to the situation, Verizon hiked up the prices of their data service.
Consequently, by the end of the year 2016, Verizon Wireless was no longer holding the top position in the telecommunications industry.
Verizon Wireless is set to introduce a new marketing strategy for its products. The method used earlier to advertise its products involved a two-year contract that had the customer sign it and can receive a subsidized new phone while paying for it in monthly installments. The company will no longer offer subsidized phones; on the contrary, customers will either have to pay up front for the devices in full or pay a total of $20 monthly. Ideally, competitors such as T-Mobile already stopped subsidizing their phones. The other mode of advertising that the company employs is about its data plans. While it may not be easy to determine how much individuals spend on data, it is even difficult to understand just how much information one may need to carry out their operations. In this regard, Verizon Wireless intends to roll out new data plans that come in manageable sizes to the convenience of the customers. This is in the sense that, the customer can decide on the type of data service plan that is most suitable for them. The small, medium and large data packages vary both in price and the amount of data availed. This is bound to attract more customers to the data service provided by Verizon and consequently help clients manage their finances (Morrison, 2015).
Ideally, despite being the Unites States’ largest telecommunications service provider, the company seems to be facing significant challenges in its operations. In essence, while its beginning started off on an upbeat start, it lost track and began making losses that cost it its customer’s loyalty and profitability as a whole. In this regard, it would be prudent for Verizon Wireless to look into its marketing strategies and the procedure it undertakes to both answer to clients’ issues and the best methods of approaching competition. First, the company may consider revising its competitive strategies in the sense that, while its primary competitors are launching consumer friendly products, Verizon Wireless should look for strategies that will enhance the quality of its service while at the same time maintaining and preserving its brand name. In this regard, rather than increasing its already high prices, the company may consider adding more important services at the same cost so as to retain its clients. Secondly, the company may opt for more realistic advertising processes and plans. Ideally, a proper evaluation of its market is needed for the business to properly strategize on the next plan of action to take. Market assessment will enable Verizon Wireless to understand the needs of the customers and provide accordingly.