The history of Verizon is quite exciting. Firstly, the name “Verizon” is a combination of the Latin word “veritas” and the popular word “horizon.”
Verizon combines business and consumer services into one huge $58 billion deal. Verizon Communications was formed on June 30, 2000, and is based in New York City. But the company was incorporated in Delaware.
This article will discuss how Verizon was formed, mergers, and more. So, keep reading to get more information.
How Was Verizon Formed?
Every company has its history, and Verizon’s is quite interesting. The company was formed on June 30, 2000, so has been in existence for over a decade now.
Verizon was formed via a merger with Bell Atlantic and GTE Corporation. AT&T formed Bell Atlantic and was the first RHC to deploy the digital termination system. The termination system was from microwave technology and was used for local electronic message distribution.
Bell Atlantic is a massive company. It made several acquisitions from its first year of operation. The companies acquired are TSI, a telecommunication specialist, Tri-Con (Tri-Continental Leasing Corporation), and MAI’s Sorbus Inc. division.
Verizon is unarguably a 21st-century telecommunications company, but the mergers that formed it had a massive role to play in the company’s current position in the telecommunications industry.
The mergers have been in the making for years. Furthermore, you can even trace some of their roots to the beginning of the telephone line of business in the 19th century.
The government started regulating the telecommunications industry massively in the 20th century, shaping the industry’s evolution. The final nail in the coffin for many businesses was the Telecommunications Act signed in 1996.
The Telecommunication Act brought about federal laws that orchestrated a shift to more market-based policies. Thus, the market became highly competitive, leading to the merger that formed Verizon.
Verizon History – Bell Atlantic & GTE Corp
Verizon Communications’s history is incomplete without a strong emphasis on the financial positions of Bell Atlantic and GTE Corp, two heavyweights in the telecommunications business.
The merger that formed Verizon remains the largest in the country’s history regarding business. There was a merger agreement between Bell Atlantic Corp and GTE Corp as far back as July 27, 1998.
Bell Atlantic and GTE had evolved on their own, even before the merger took place. Both companies are no strangers to acquisitions, mergers, and divestitures.
GTE was a significant player in the telecommunications industry. Its revenue around 1999 was over $25,000, and it served 35 million access lines via subsidiaries from different parts of the globe, such as the United States of America, Canada, and the Dominican Republic.
GTE also served access lines via affiliates to countries like Puerto Rico, Canada, including Venezuela. So, it was one of the biggest telecommunications companies even before the merger that produced Verizon.
A Handy Tip: Access lines comprise individual connections from a customer’s premises to a telecommunication network).
When the era of wireless telecommunications began, GTE was also a leader. GTE was one of the biggest wireless operators in the United States of America, with over 7.1 million wireless customers. In addition, the company could have added another 72.5 million wireless customers.
Bell Atlantic Corporation was even bigger than GTE Corp. It generated almost twice GTE’s revenue around 1999. While GTE recorded $25 billion in 1999, Bell Atlantic Corp had $33 billion.
Bell Atlantic also served more access lines to customers than GTE. Its access line customers were over 43 million, comprising millions of households and businesses.
Bell Atlantic was one of the most successful telecommunications companies in the United States. It ran a successful wireless communication business locally and internationally.
In the United States, Bell Atlantic’s wireless customers were over 7.7 million, making it one of the largest wireless communication providers in the country. In addition, it managed successful international wireless investments spread across Europe, Latin America, and the Pacific Rim.
Bell Atlantic directory services and operations were the world’s largest. It offered directory services in the United States and Europe.
The reason for the merger was simple. Bell Atlantic and GTE want to create a telecommunications company with the scope and scale to compete as one of the industry’s top-tier firms.
The agreement to form the merger was established in 1998, but they finally merged in 2000. It was approved by shareholders from both companies, including 27 state regulatory commissions, the Federal Communications Commission, various international agencies, and the DOJ’s (U.S. Department of Justice) clearance.
At the time of the announcement of the transaction between Bell Atlantic and GTE, the value of the merger was $52 billion.
In addition, Bell Atlantic already had a sophisticated network and served over 13 states, ranging from Maine to Virginia. GTE brought something to the table too. It already had a robust national footprint, long-distance expertise, and advanced data communications capabilities.
The merger between both companies was a match made in heaven. They had the infrastructure, networks, national footprint, and financial muscle to scale up and spread their tentacles to other parts of the country.
Verizon Joins NYSE And NASDAQ
Verizon’s merger with Bell Atlantic and GTE was the biggest in the history of mergers in the United States of America. Its financial capacity and size were enhanced following the merger.
Verizon started trading on the New York Stock Exchange (NYSE) on July 3, 2000, a few days after the merger, but that is not all. On March 10, 2010, it started trading in the NASDAQ stock exchange market.
Verizon is traded in both stock exchanges as VZ.
The Wireless Verizon Starts A New Chapter
The history of Verizon Wireless began on September 21, 1999. Bell Atlantic and Vodafone Group Plc (formerly Vodafone AirTouch Plc) announced a joint wireless business.
The mergers’ target was to have a national footprint and become a leader in wireless. The plan was to create a single brand and digital technology using wireless assets from both companies.
The merger was successful and received regulatory approval within six months of the application. Thus, the latest “Verizon” brand was launched in 2000. The launching took place on April 3, and by April 4, the wireless joint venture had started operations as Verizon Wireless.
GTE Wireless operations became part of the new Verizon Wireless, creating the most extensive wireless company in the country.
Verizon had major shares in Verizon Wireless. It had 55 percent of the shares and had management control over the joint venture.
Charles R. “Chuck” Lee became the founding Chairman of Verizon’s Board and the co-CEO. Charles was also the former Chairman and CEO of GTE.
Bell Atlantic also occupied a prominent leadership position in Verizon Wireless. Ivan Seidenberg, former CEO of Bell Atlantic, became Verizon Wireless’ founding President and co-CEO.
A leadership plan was agreed upon during the merger, and the company’s leaders were expected to honor the agreement. Charles R. Lee retired from Verizon in 2002 in line with that agreement. The next was Ivan Seidenberg. Ivan retired in 2011, while Lowell C. McAdam took over as CEO.
Verizon Communications: What is Happening Today?
Verizon Communications generated over three times the revenue it had following the merger. In 2004, the company joined the Dow Jones Industrial Average.
In the wireless markets, Verizon boasts a national presence. It has its tentacles in several states across the country. However, in the aspect of wirelines, Verizon boasts a regional president.
Over 100 million Americans connect to Verizon daily. That points to all you need to know about how massive the company has become.
In 2006, Verizon made a move that pushed the company farther ahead of its competitors. It acquired MCI Inc., becoming a top provider of advanced communication and information technology services.
Verizon now renders these advanced communications and information solutions to multinationals and well-established businesses, including the government.
In 2009, Verizon made another transformational move. This time, it acquired Alltel Corporation. The deal took place in early 2009 and transformed Verizon.
With the acquisition, Verizon now became the most extensive wireless service provider in the United States of America. Its customer base grew massively.
Verizon is not new to the acquisition and merging of companies. It is one of the company’s business models that have worked wonders.
In June 2015, the company moved to acquire AOL Inc, which kick-started a new chapter of the company’s history.
Verizon’s mission is to become the number 1 (#1) global media technology firm for advertisers, creators, and consumers on a mobile-first network platform. The company is customer-centered, a move that played a role in its impressive growth in the industry.
Since 2015, Verizon has been doing wonders and pushing itself to the top. It added 177,700 workforces and generated massive revenue of $132 billion in 2015.
Verizon’s revenue pushed it to #15 on the Fortune 500 ranking. In addition, Verizon has been operating one of the most reliable wireless networks, servicing over 112 million retail connections across the globe.
In 2015, the company generated $92 billion from wireless. It provided communications, including entertainment services, over the United States of America’s most advanced fiber-optic network.
In addition, Verizon provides integrated business solutions to customers in over 140 countries. Around 2014 and 2015 alone, the company invested approximately $35 to maintain, upgrade, and expand its technology infrastructure.
Verizon’s revenue gives it the upper hand in research and development. The company has invested a fortune in developing critical areas like wireless and broadband.
Verizon Wireless Investment And Growth
Since 2015, Verizon has invested massively in wireless. The company intended to capture a large chunk of the wireless market and started making giant steps to achieve this long ago.
The company has made several spectrum purchases too. In 2008, the purchase of Rural Cellular Corporation gave him access to rural markets. Moreover, Verizon purchased the company for $2.7 billion.
It also purchased Alltel, a wireless company controlling around 13 million customers. It paid $5.9 billion for Alltel’s equity. The company did not stop there.
In 2011, it announced an agreement to buy Advanced Wireless Spectrum (AWS) licenses from SpectrumCo and Cox TMI. Furthermore, both deals were a significant step in the right direction.
Here is how the moves turned out. The spectrum license agreement covered 93% of the American population.
In 2015, Verizon participated in an auction organized by FCC. FCC auctioned 65 MHz of spectrum, identified as the AWS-3 band. Verizon participated in the action and won the highest bidder on 181 spectrum licenses.
In total, the company paid $10.4 for the auction. Verizon has invested massively over the years. It invested massively in 2015 ($9.9 billion), 2014 ($0.4 billion), and 2013 ($0.6 billion). It invested all in acquiring a wireless license.
Around 2008, Verizon invested $9.4 billion. The investment was to gain a nationwide spectrum footprint. The acquisition also included 102 spectrum licenses for individual markers around the United States of America.
The Launching of Verizon’s 4G LTE
Verizon will surely make that list if asked to name a company that re-invests massively to foster growth and expansion.
In 2008, Verizon invested $9.4 to gain a nationwide spectrum footprint, including 102 spectrum licenses for individual markets in the United States., in FCC’s 700 MHz.
Verizon launched the 4G LTE, which is the Fourth-generation Long Term Evolution. The broadband network was launched in 2010, the most advanced in the United States.
Verizon’s biggest investment in wireless took place in February 2014. The company finalized the acquisition of Vodafone’s 45 percent indirect interest in VZ Wireless.
The transaction caused Verizon a whopping $130 billion. It was a historic transaction, called one of the largest nationwide.
Conclusion
The history of Verizon is an exciting one. It boasts a rich history that everyone in business should learn from.
Verizon has spent a fortune acquiring companies to position itself as a leader in telecommunications. Today, the company serves over 100 million Americans and counting.