Verizon's Stratton sees "host" of opportunities to improve wireline, wireless operations

Verizon (NYSE: VZ) sees that there are a number of new ways to increase efficiency across both its wireline and wireless business segments by using new technologies like software-defined networking (SDN) and improving back-end processes.


Speaking to investors during the Jefferies Technology, Media and Telecom conference, John Stratton, executive vice president and president of operations for Verizon, said that there are more opportunities to extend the efficiencies created by its company-wide Six Sigma efficiency program.

"I think there's an opportunity to continue build on that work, and we look at it in a couple of different places," Stratton said. "As we bring this operations group together, which combines the wireline and wireless businesses together, there are some synergies on the back end."

Stratton, formerly the EVP and president of Global Enterprise and Consumer for Verizon, took on the new role as executive vice president and president of operations in mid-February, with operational responsibility for Verizon's wireless and wireline businesses.

Some of the back-end synergies could be to use new technologies like SDN to reduce costs to serve customers.

But using technology innovations is just one way it will improve operations. Other factors include simplifying basic functions such as distribution and customer support.

"There's a whole host of opportunities that remain in the fundamental operations side of the business," Stratton said. "This would be in distribution, in customer support and service and how we can effect change and reduce the complexity of the environments, simplifying everything we do, allowing commerce to flow and reducing the need for customers to call gives us another cost base that we can address as we move forward."  

In the wireline side of the house, it's clear the telco is focused on cutting costs.

This cost-cutting process has been seen with its ongoing copper-to-fiber migration, where it moves what it calls "chronic" problem copper customers, or those who have had multiple service calls in a given year, over to fiber.

During the first quarter, Verizon migrated 47,000 customers from copper onto fiber, helping it come closer to reaching its 2015 goal of 200,000 conversions for the year. At the same time, the telco is decommissioning 10 Central Offices.

Converting customers from copper to fiber has three benefits: improving customer satisfaction, lowering service costs and a long-term opportunity to upsell customers FiOS TV and data services.

Another initiative that could drive more network and cost efficiencies is the migration to SDN as it announced in April.

While it's still early in the game, Verizon told FierceTelecom in a previous interview that the initial focus for SDN in the wireline network will be on migrating legacy elements and functions onto software-based platforms. What this means is that instead of putting in a brand new piece of hardware, it is looking at migrating that function over to software.

At this point, the telco is currently working with its network partners to identify functions that can be moved into software-based architecture.

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