Verizon has picked CTO Hans Vestberg to succeed Lowell McAdam as CEO, the company announced Friday, signaling how serious the telecom giant is about furthering its 5G network and technology investments.
Vestberg, who has spearheaded Verizon’s 5G efforts and overseen expansion of its residential fiber network, will replace McAdam effective August 1. McAdam will then act as executive chairman of the board until his retirement at the end of the year, following seven years as CEO of Verizon.
Vestberg served as president and CEO of Ericsson for six years prior to joining Verizon in April 2017.
“I am humbled to be appointed CEO of Verizon at such an exciting and dynamic time for our company and industry,” Vestberg said in a statement. “We are experiencing unprecedented changes in the way users interact in the digital world, and we are racing ahead to remain at the forefront of technology, connectivity and mobility.”
Many were surprised that Verizon veteran John Stratton, president of global operations, was not named in the role, but Wells Fargo analysts said the Vestberg choice points to the importance of Verizon’s fiber strategy. Update June, 8: Stratton has stepped down from his role at Verizon effective immediately, and will support a transition as a strategic advisor reporting to McAdam before leaving the company by the end of 2018.
“We had originally thought that Vestberg was hired to give his ‘under the hood’ view of global networks and help VZ with its move to expand its fiber network out of region,” Wells Fargo Senior Analyst Jennifer Fritzche wrote in an investor note. “Obviously, there was much more to this hire.”
“We have long thought the VZ fiber build and focus on IoT was more significant than the Street may fully appreciate,” she noted. “We see this announcement as further evidence of this.”
The announcement comes as Verizon’s fellow players are pursuing megadeals. In late April, T-Mobile and Sprint finally announced they plan to merge, consolidating the wireless market to three major carriers, and the outcome of the pending AT&T-Time Warner merger is slated for June 12.
Verizon is clearly taking a different path than No. 2 wireless carrier AT&T, which is poised to become a big content owner if it’s successful in court next week. While Verizon has pursued smaller media acquisitions under McAdam, including the purchase of AOL for $4.4 billion and Yahoo for $4.5 billion, executives have previously said being a distributor of content, rather than the underlying owner, is the right move at this point.