Leading telecom company, Verizon Communications Inc. (VZ - Analyst Report) has collaborated with, cloud-based voice marketing services provider THECALLR to offer enterprise cloud solutions. Financial details of this agreement were not disclosed.
According to the press release, THECALLR will utilize Verizon's private enterprise cloud infrastructure as the platform for infrastructural development of its voice-based enterprise services. For Verizon, the agreement expands its footprint beyond conventional wireless service and strengthens its enterprise business globally.
Going forward, Verizon expects the enterprise business to contribute more to wireline revenues and profits. This can be achieved by rationalizing the enterprise solutions product portfolio, eliminating old products, reducing merchandise complexity, streamlining services and consolidating networks to enhance efficiency.
The company’s enterprise division comprises advanced business technology solutions for a number of corporations and organizations, including American Tower Corp. (AMT - Analyst Report), d’Amico Societa di Navigazione, the District of Columbia, Kohn Pedersen and Fox associates, Marathon Petroleum Corp. (MPC - Analyst Report), Panviva and Veolia Environnement S.A. . To support the company’s landline products and services, primarily FiOS Internet and FiOS TV, management is appointing 100 full-time sales employees to the national customer-retention center. This unit will manage sales issues as well as extend customer support.
Verizon has a strong foothold in the wireless business and continues to capture additional market share via robust deployment of the 4G Long Term Evolution network. This leads to improved operating and capital efficiency. The company is leading the industry in terms of 4G deployment. Verizon expects to convert the entire nationwide 3G footprint to 4G by the next couple of months. The company’s new data plan — Share Everything — is expected to generate high revenues over the long term.
However, despite Verizon’s significant growth prospects in the wireless arena, we remain wary of heavy iPhone subsidies that can hurt earnings in the near term. Further, Verizon’s wireline division is currently facing challenges from the ongoing restructuring and cost-saving efforts.
Although the spectrum deals are expected to be accretive over the long term, we believe these might put pressure on the balance sheet in the short term due to falling cash balances and increasing capital expenditures. In addition, the we believe that the company’s decision to buy the remaining stake at Verizon Wireless may stress its balance sheet and result in lower investor returns.
Currently, Verizon has a Zacks Rank #3 (Hold).