Verizon (NYSE:VZ) is rolling out a new mobile wireless service backed by an unexpected brand. The planned launch of Yahoo! Mobile was reported Wednesday by CNN Business. The new service will offer unlimited text, talk, and data for $40 per month, with taxes and fees included, and operate on Verizon's main 4G LTE network.
The telecom giant acquired Yahoo! for roughly $4.5 billion in 2017, but it has struggled to get value out of the unit. Verizon Media Group CEO Guru Gowrappan told CNN Business that Yahoo! Mobile is part of Verizon's efforts to diversify its revenue streams and have advertising, subscription, and transaction revenues be roughly equal contributors in five years.
What will it mean for Verizon?
Gowrappan thinks the company can create synergies by pairing the Yahoo! media brand with Verizon's highly rated mobile wireless network. The new service doesn't currently offer family plans, but Verizon left the door open for additional packages and stated that it plans to roll out 5G support for Yahoo! Mobile later this year.
Recent studies conducted by RootMetrics found that Verizon's 4G LTE and 5G networks significantly outperformed alternatives from AT&T and T-Mobile. If the company manages to continue offering better performance than its rivals and rolls out low-cost options like Yahoo! Mobile, Verizon could strengthen its 4G LTE position and build an early lead in 5G subscriptions. However, the company also has to be wary of pushing mobile-wireless prices down in hopes of building up content ventures that have previously found little success.