Verizon marked down the value of its business services unit by $5.8 billion as clients shun wired communications.
The wireless carrier said in a regulatory filing with the Securities and Exchange Commission Wednesday (Jan. 17) that it reduced the value of that side of its business because of “secular declines, as well as continuing competitive and macroeconomic pressure, in wireline revenue across its customer groups.”
The balance of its business unit was $1.7 billion at the end of last year, according to the filing. “Wireline revenue” refers to communication services provided to businesses via copper or fiber wires.
Verizon’s business services segment has seen demand drop while the company’s mobile business service has risen, Bloomberg reported Wednesday.
Bloomberg said its intelligence analysts believe the outlook “suggests the unit will take time to return to higher growth due to slack demand.”
Verizon’s wireline business revenue dropped 8.1% through the third quarter and is likely to remain “muted” this year, per the report.
The decline comes as Verizon and other carriers are making major 5G technology and performance upgrades, as well as devices.
“5G broadband networks are viewed by many as a business-first digital innovation and enterprise revolution,” PYMNTS reported last month.
“It’s because 5G broadband networks give a significant boost to data transfer speeds and allow for highly integrated digital connection, and the rapid rise in digital connectivity over the past decade has radically transformed enterprise and industrial operations while accelerating the importance of real-time data and operational connectivity,” the report added.
Verizon teamed with Zebra Technologies in December to launch mobile device and software solutions aimed at helping Verizon Private 5G customers simplify processes for their frontline workers in transportation and logistics, retail, manufacturing and other sectors.
“Private 5G represents a significant inflection point in wireless connectivity — providing a major technology and performance upgrade that will drive enhanced visibility and operational benefits for enterprise customers,” said Julie Johnson, senior vice president and general manager of enterprise mobile computing at Zebra.
In 2024, the report said, “agility, automation and artificial intelligence are the name of the game for businesses looking to compete and win. 5G networks offer the best way to power the connectivity required for these innovations.”
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