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1. Article Summary

This particular article published by Wall Street Journal on Tuesday, November 27^th was somewhat intriguing. I have always thought of Verizon Wireless as a company that lost its consumer appeal and user friendliness years ago. What was worse was the fact that company management did not seem to be doing anything to ensure company’s competitiveness in the future. But yesterday’s article in Wall Street Journal changed some of my earlier opinions.

Verizon, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, announced that it would open up its wireless network for third-party devices. This move will allow customer to purchase the handset or any other mobile device in any retail outlet they wish and be able to use it on Verizon network. Prior to the move, customers were able to use only the devices sold and outfitted by Verizon itself.

Article goes to discuss several of the US cellular companies and in essence create a side-by-side comparison that points out some of the potential implications this move might have on the company. In addition, article describes Verizon Wireless management’s reluctance to cooperate with open standards protocols proposed by Google to the FCC. Its not surprising that amidst Verizon’s opposition to the proposed “open network” standards that would allow customers use any device they wish Verizon’s latest move to open up their own network seems like a strategically reacting move.

As article continues, it reveals Verizons plans to publish the specific details of system infrastructure that will allow developers that create mobile devices to better design their devices for seamless use on the Verizon network. Although publishing company’s system specifics is not something new, typically it comes after significant litigation and normally is preceded by a court order as it was the case in Microsoft’s European monopoly proceedings. This latest move by Verizon is seen as its managements attempt to gain a corner on the market of open standards for communications that Google is so insistent on pursuing.

Although Verizons decision might have a relatively large impact in terms of managerial restructuring and customer service for the company itself. This move also marks an important stepping-stone for wireless industry as a whole. Wireless industry in the United States is perhaps on a path to become more decentralized, flexible and more compatible with its European counterparts.

1. 2. Personal Reaction

I believe that this article has great value to business management students as it points out the importance of proactive management. Although Verizon Wireless is moving towards somewhat de-centralized wireless network model, many networks that are operating in the US today area already experiencing the benefits that this model brings. For example, AT&T allows handsets that are not sold by it’s retail stores to be used on it’s wireless networks causing many customers to switch to AT&T simply due to large variety of devices the network supports. Verizon has held on to the outdated business model that did not keep the customer in mind and now the company is attempting to play catch up.

Although Verizon will undoubtedly gain some consumer confidence and perhaps a larger market share as a result of this move, I believe the company has much larger issues. Verizon seemingly has done very little to create a network that is more compatible with other worldwide carriers. As opposed to AT&T’s GSM network Verizon Wireless still uses an outdated analog signal in some of it’s towers, as well as incompatible digital spectrum that is not used anywhere also in the world. I think that these are some of the issues that Verizon Wireless management team must consider in order for company to succeed. While opening the network for third-party devices is a step in the right direction, Verizon needs to do more to ensure that consumers see the company as a viable communication choice amidst growing competition.

One positive and innovative idea that I see coming out of this article is the fact that Verizon Wireless management is considering the history in predicting the future and is trying to speculate where technology is going to end up. One of the key remarks in the article is the fact that Verizon hopes that the wireless standards become a way of life the same way the Internet has. Verizon says that it hopes to have anything that would like to be linked to the company network on board, including computers, wireless book readers, and possibly, kitchen appliances.

I think this article shows a reality of today’s competitive and dynamic market. It shows that management no longer is able to survive simply on reactive strategies and only responding to issues and challenges as they arise. Today’s technologically savvy consumers expect more from service industry, they are no longer willing to be bound by irrational company standards of limited choices. It seems to me that if a company like Verizon were to be successful, it absolutely must engage in proactive and maybe even aggressive advancements. No longer is the best quality the only factor that captures consumer spending. Today, choices and options play overwhelmingly important role in the consumer spending decisions.

Verizon as well as many other technology companies must stay sensitive to consumer needs that go beyond the obvious quality of service. As technology industry grows it continues to offer low barriers to entry thus creating healthy competition for consumer dollars. Consumers, now more than ever before focus on environmental impact psychological appeal and physical appearance when making technology purchases. Apple Inc. has been doing a great job in capturing consumer attention with its innovative products that appeal to all levels of consumer interests. Cell phone companies must shift their thinking paradigm and begin to employ a management style that would allow them to adapt quickly to consumer needs.

Reference:

Almon S. & Dionne, S. (2007). Verizon to Open Cell Networks to Other’s Phones.

Wall Street Journal Online. Retrieved November 28, 2007, from http://online.wsj.com/article/SB119617188870905241.html