Verizon Business has had a roller-coaster start to the year but is focused on growing operations based on a few key market segments, including its position in the slowly evolving private 5G space.

Scott Lawrence, SVP for global solutions at Verizon Business, explained in an interview with SDxCentral that the company sees opportunities this year in accelerating digital transformation efforts; managing technology convergence around wireline and wireless networks with security, IT and OT; and being able to create a differentiated experience for customers.

“All of those are intertwined, so then you start looking at how do you match that to deliver true business outcomes right to those enterprise customers that are trying to balance how to accelerate digital transformation while managing risks and while creating differentiated experiences for their customers,” Lawrence said.

Those differentiated experiences will also increasingly ride on the back of Verizon’s private 5G offerings.

Lawrence said private 5G remains a “tool in the toolbox” for the business unit as it looks to help enterprise and government customers flesh out their digital transformation goals. This includes an increased focus on the importance of a more robust networking structure to support IT, OT and cybersecurity goals.

And while the private 5G space remains overfilled with platform providers and underfilled with actual deployments, Lawrence stated that Verizon’s network and spectrum assets continue to be a unique differentiator in the market. He specifically cited the carrier’s deep licensed spectrum position that allows it to provide a more resilient private 5G platform than unlicensed or quasi-licensed spectrum like Consumer Broadband Radio Service (CBRS), which are limited by regulatory borders.

“I think you're seeing that pivot with more customers moving away from CBRS into licensed spectrum. That's where I believe we can truly bring a unique, differentiated experience to our customer because we can carry that beyond the borders or their enterprise footprint into the macro network and beyond,” Lawrence said. “And then you start layering capabilities like standalone core and slicing that gives you even more ability to drive unique use cases through edge compute and the slicing capability. CBRS will have certain limitations into really unlocking the true value of what Verizon can bring, and that's leveraging our licensed spectrum.”

Lawrence added that platform providers also need to better understand the true needs of enterprises and their over-taxed IT teams.

“I think the real key is not necessarily private 5G itself,” Lawrence said, adding, “but when you take a step back, what customers are really interested in is how does it all work together. How does my in-building network work with private 5G, or with the investment I made in Wi-Fi? How does that connect into my wide-area network and in my multicloud environment? And where do I get the business benefits? And how does it start to address some of those issues of convergence like OT and IoT?”

This also includes having flexible deployment models. Lawrence said Verizon Business is primarily focused on fully managed private 5G deployments, but also looking to add some co-managed options for enterprises that want some level of control. There is also the need to work through expense models.

“The other piece that we're also looking at is to create flexibility and a commercial model for our clients moving more to an opex model for private 5G that can build off of our network-as-a-service offering that we have,” Lawrence said. “It goes back to that whole concept of convergence and the use-what-you-consume models that customers can quickly deploy in an environment and spin up or expand as they need and contract as they need.”

Lawrence said those questions will find more suitable answers this year. “I believe we are well on our way of this journey of much broader adoption of private 5G across a whole different landscape of verticals for our customers,” he added.

Analysts have noted that journey could see total spend on private networks surpass $9 billion by 2028.

Verizon Business’s 2024 focus comes on the heels of a trying time for the business unit. Verizon Business includes the carrier’s wireless and wireline services targeted at enterprise and public-sector customers. Those services include its ThingSpace IoT, 5G multi-access edge computing (MEC), private 5G, security, managed services provider (MSP) and Virtual Network Services (VNS).

Verizon earlier this year slashed the value of its business operating unit, citing a downturn in the division that highlighted the company’s ongoing challenges in converting that business toward new technology opportunities.

Verizon in a Securities and Exchange Commission (securities exchange commission (SEC)) filing stated that the devaluation was part of the carrier’s most recent five-year strategic planning review. That review found a notable downturn in its business unit over the past year, which resulted in Verizon recording a $5.8 billion impairment during the fourth quarter of last year for that operating unit.

Verizon specifically cited “secular declines as well as continuing competitive and macroeconomic pressure, in wireline revenue across its customer groups.”

“In the fourth quarter of 2023, in connection with its annual budget process, Verizon completed a comprehensive five-year strategic planning review of its business reporting unit, resulting in lower financial projections compared to the prior year five-year strategic planning cycle,” Verizon said. “The revised projections were used as a key input into the business reporting unit’s annual goodwill impairment test performed in the fourth quarter of 2023. The impairment test determined that the fair value of the business reporting unit was less than its carrying value.”

That underperformance was highlighted by Verizon’s most recent earnings release where its business operations reported a 3.6% drop in revenues for 2023 compared with 2022, and operating income fell a more substantial 24% year over year.

Verizon’s management explained that legacy wireline operations were having the biggest impact on its current business financials, which was offsetting more robust growth in business wireless and fixed-wireless access (FWA) growth.

To help combat this malaise, Verizon Business CEO Kyle Malady recently stated that the operating unit would shut down “products and services that are not helping us grow.”

“This will allow us to refocus resources in the areas that will move the needle for us going forward,” Malady said during the carrier’s recent sell-side analyst meeting. Malady cited Verizon Business shutting down its BlueJeans video conferencing service as an example.

Lawrence noted these outside influences were not impacting Verizon Business’s approach to 2024.

“Our pipeline is strong. Our global customers are excited to hear from us and the thought leadership we can bring,” Lawrence said. “I'm approaching this year, like I do every year, as a big year, and I'm excited for it.”