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The Best Verizon Communications Inc. Headlines in 2015

By Daniel B. Kline - Dec 29, 2015 at 10:28AM

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It was not all good for the company this year, but it did have some highlights.

Verizon (VZ 1.17%) operates in highly competitive business segments where the past year brought increased pressure from a number of market factors.

In its wireless business the company has had to deal with T-Mobile (TMUS 0.54%) which has been attempting to disrupt the industry by lowering prices, dropping contracts, and generally casting aside what had been industry conventions. Despite that, Verizon held its own and remained the top wireless carrier mostly by pushing quality over price in its marketing.

In pay television Verizon also held its own despite the looming threat of cord cutting. There were slightly less people paying for cable or cable-like services through the first three quarters of 2015, but the losses were not as big as expected and Verizon, like the other players in the space, have yet to really be affected by cord cutting.

Broadband was a similar story where Verizon did not post the gains that some of the major cable companies did, but it did not see any big losses.

Overall it was a solid, if unspectacular year for the company with its stock price dipping then recovering, but not equaling where it began 2015. The biggest story for the company and the industries it operates in may be not what happened during the past 12 months, but the ominous headwinds moving forward.

Still, there was a lot of positive news for Verizon in 2015 and here are some of the top headlines.


Verizon still has the best network
In its wireless business Verizon has hung its hat on the idea that the quality of its network justifies it charging higher prices than rivals including T-Mobile. The company does not point out the higher prices part, but it has used the slogan "better matters" in its commercials. That makes it imperative that Verizon retain its title as having the top network.

The company did exactly that this year keeping the top spot on RootMetrics' First Half of 2015 Mobile Network Performance in the United States report.

"Verizon's performance across our testing of the United States was excellent," the report said. "Verizon earned bragging rights for the fourth consecutive time as winner of the United States RootScore Award for Overall Performance. Verizon also finished atop the podium in five out of six categories for the second straight testing period."

It was perhaps not the same crushing victory it was in previous reports and competitors are gaining, but it was enough for Verizon to keep saying it's the best. That claim and the ability to substantiate it, lets the company keep charging more while passing T-Mobile off as cheaper because it should be.

You've Got AOL
While major deals involving AOL have a history of not working out very well, Verizon may have scored a coup in purchasing the company for about $4.4 billion in a deal which closed in June. This is not the AOL that made its name selling dial-up Internet access (though amazingly it still has a few million customers paying for that) it's a content company which could prove a valuable tool in helping Verizon keep subscribers.

"There's what we call the 40-40 opportunity, which is $40 billion going to mobile and $40 billion going to video," AOL CEO Tim Armstrong told CNBC.  "Nobody owns the future of mobile right now and this is the most powerful combination of those two areas, of the Internet and mobile together."

That's a bold prediction, but going forward content could be key to providing subscriber value and Verizon did not have it while AOL owned a number of key brands including Huffington Post as well an advertising platform that Verizon should be able to capitalize on.

Video is holding steady
While 2015 was supposed to be the year of cord cutting, that simply did not prove to be the case and Verizon actually did better than many of its rivals even if it could be argued that none did as poorly as many predicted at the beginning of the year.

In the first quarter, according to research from Leichtman Research Group (LRG) Verizon gained 57,000 paying video customers. During that quarter the industry only gained 10,000 total new customers. In Q2 the industry shed nearly half a million subscribers, but Verizon bucked that trend and added 26,000. That trend followed into the third quarter when Verizon gained another 42,000 paying video customers while the industry as a whole lost 190,000.

Those are very strong numbers when the overall paid video industry is in slow decline and they suggest that Verizon is better set up to weather the cord-cutting storm than some of its rivals.

Daniel Kline has no position in any stocks mentioned. He is still paying for cable in multiple locations. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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