When Verizon announced June 8 that it was elevating current CTO and EVP of Global Networks Hans Vestberg to CEO to replace long-time leader Lowell McAdam who is retiring August 1, the news surprised many in the industry.
But some believe Vestberg’s appointment is a signal that Verizon wants a smart, visionary tech leader to move the company forward. One long-time wireless executive, who asked to remain anonymous, compared Vestberg’s appointment to AT&T’s 2017 promotion of John Donovan to CEO of AT&T Communications. Donovan, previously AT&T’s CTO, is credited with being the driving force behind that company’s efforts to virtualize its network and drive down costs.
Breaking with Tradition
One reason some were surprised by Vestberg’s promotion is that Verizon has historically promoted from within. McAdam had worked for the company for 11 years in a variety of senior management positions before being elevated to the top job in 2011.
And many thought John Stratton, Verizon’s EVP and president of global operations, was a shoe-in for the CEO slot. Stratton started his career at Bell Atlantic Mobile in 1993 and worked for Verizon since it was created in 2000. He is now planning to retire this year.
But over the past few years Verizon has become more receptive to outsiders. For example, Ronan Dunne, EVP and group president of wireless, was previously CEO of Telefonica UK (O2). And Tim Armstrong, CEO of Verizon’s Oath, was chairman and CEO of AOL, which Verizon acquired in 2015.
Also notable, Vestberg’s former Ericsson colleague Rima Qureshi joined Verizon’s executive team last November and serves as the company’s EVP and chief strategy officer.
But now that Vestberg is becoming CEO, will he start shuffling the existing management team? And who will fill Vestberg’s shoes in the CTO role? A Verizon spokesman said that first Vestberg needs to get settled into his new job before any other announcements or changes will be made.
A Visionary Leader
Vestberg’s abrupt departure from Ericsson in July 2016 was not surprising. The infrastructure company had been struggling financially for several quarters, and in second-quarter 2016 it reported a decline of 24 percent in net profits.
Despite Ericsson’s troubles, Vestberg is well regarded by many of his Ericsson colleagues. One former co-worker, who asked to not be identified, praised him for his intelligence and vision, noting that his network infrastructure background will likely be a big benefit for Verizon’s 5G rollout, which is expected to happen in a handful of markets later this year.
Open to Partnerships
Another strength of Vestberg’s is his ability to forge partnerships, even with former foes. When Vestberg was the CEO of Ericsson, the company signed a seven-year cross-licensing deal with Apple, putting an end to a multi-year patent spat that the companies had been battling.
But perhaps the best example of his ability to think out of the box is the November 2015 strategic partnership that the company forged with Cisco. As part of that deal, the two companies said they would share patents, develop joint products, and align customer service across a broad customer base.
Since Vestberg’s departure, that deal has floundered. Current Ericsson CEO Borje Ekholm told investors at Ericsson’s Capital Market Days in November 2017 that the company was more focused on figuring out its own strategy than it was on the partnership.
Nevertheless, it does exemplify Vestberg’s openness to new business models and alliances that in the past were unheard of in the telecom industry. And now that many large operators realize they need to embrace open source software projects and a DevOps model to stay ahead of the game, Vestberg’s technology chops combined with his visionary thinking may be just what Verizon needs to stay ahead of the curve.