Verizon went with a relative newcomer over a company veteran to replace its CEO - and that may signal a shift in the company's long-term strategy
- Hans Vestberg, chief technology officer at Verizon, will step into the role of CEO in August, replacing seven year veteran Lowell McAdam.
- Vestberg previously ran telecom company Ericsson AB, before an ouster in 2016.
- Vestberg and Verizon veteran John Stratton were the two top contenders for the CEO role, according to the Wall Street Journal.
- His hire may signal that Verizon will be more focused on building its network than making big deal, say analysts.
Verizon Communications announced Friday that its chief technology officer, Hans Vestberg, will run the company starting in August. He will replace current chief executive Lowell McAdam, who's held the position since 2011.
"Hans is an energizing force who will continue to position Verizon to lead the Fourth Industrial Revolution - the emergence of technologies that blend the physical and the digital to create historic breakthroughs in connectivity and mobility," McAdam said in a statement.
Vestberg, 52, is a relative newcomer to Verizon, starting his role in April 2017 after an ouster at Swedish multinational telecommunications company Ericsson AB.
Born in Hudiksvall, Sweden, Vestberg started at Ericsson in 1991, rising through the ranks to assume the CEO position in 2009. In 2016, unable to turn around slumping profits at Ericsson, Vestberg was ousted from the company.
"As the industry enters a next phase, driven by 5G, IoT and Cloud, it is time for a new CEO to step in and continue the work to ensure Ericsson's industry leadership," Vestberg said at the time.
Verizon's choice of Vestberg may signal the company plans to retain focus on network improvements, rather than secure deals, at a time when other rival companies have looked to deals to diversify their businesses, Bloomberg reported.
"I'm happy with executing the plans we have already laid out," Vestberg told Bloomberg in response to a question about merger prospects. "We are constantly evaluating things, but there's nothing that we are looking at right now."
AT&T, which purchased DirecTV in 2015, is in the midst of an $85 billion play for Time Warner Inc, while Sprint Corp. and T-Mobile US Inc. have a proposed $26 billion merger.
Vestberg also has a background that's more in line with building out its network, The Wall Street Journal reported. He's an expert in network architecture and spent his first year at Verizon talking to investors about 5G. "At this point he's closer to the current focus of the company," John Hodulik, an analyst at UBS who covers Verizon, told The Journal.
His appointment is likely to surprise some investors who believed Verizon veteran John Stratton would assume the role of chief executive, according to The Journal. Stratton, president of global operations, will retire this year.
McAdam will step down August 1 and will remain on as executive chairman of the board through 2018. He will remain as non-executive chairman after that.
