Sunday, April 23, 2023

Mergers with GTE and Vodafone (2000–2002)

Mergers with GTE and Vodafone (2000–2002)[edit]

Former logo used from May 19, 1998, to September 1, 2015

Two months before the Federal Communications Commission (FCC) gave final approval on the formation of Verizon Communications, Bell Atlantic formed Verizon Wireless in a joint venture with the British telecommunications company Vodafone in April 2000.[26][27][28] The companies established Verizon Wireless as its own business operated by Bell Atlantic, which owned 55% of the venture.[27] Vodafone retained 45% of the company.[27] The deal was valued at approximately $70 billion and created a mobile carrier with 23 million customers.[26][27] Verizon Wireless merged Bell Atlantic's wireless network, Vodafone's AirTouch and PrimeCo holdings, and the wireless division of GTE.[27][29][30] Due to its size, Verizon Wireless was able to offer national coverage at competitive rates, giving it an advantage over regional providers typical of the time.[26]

Bell Atlantic changed its name to Verizon Communications in June 2000, when the FCC approved the US$64.7 billion merger with telephone company GTE, nearly two years after the deal was proposed in July 1998.[31] The name Verizon derives from the combination of the words veritas, Latin for truth, and horizon.[32][33]

The approval came with 25 stipulations to preserve competition between local phone carriers, including investing in new markets and broadband technologies.[31] The new entity was headed by co-CEOs Charles Lee, former CEO of GTE, and Bell Atlantic CEO Ivan Seidenberg.[31]

Verizon became the largest local telephone company in the United States, operating 63 million telephone lines in 40 states.[34] The company also inherited 25 million mobile phone customers.[34] Additionally, Verizon offered internet services and long-distance calling in New York, before expanding long-distance operations to other states.[31][35]

Approximately 85,000 Verizon workers went on an 18-day labor strike in August 2000 after their union contracts expired.[36][37] The strike affected quarterly revenues,[38] resulting in Verizon Wireless' postponement of the company's initial public offering (IPO)[38] (the IPO was ultimately cancelled in 2003 because the company no longer needed to raise revenue for Verizon Wireless due to increased profits),[39] and created a backlog of repairs.[37] This strike did not involve all company employees, as mostly line technicians and user technicians of the company are union.

Verizon launched 3G service in 2002, which doubled the Internet speed of the time to 144kb per second.[40] In August 2002, Verizon began offering local, long-distance and mobile calling, as well as Internet service, in a bundle. It was initially only available to customers in New York and Massachusetts.[35]

2003–2005[edit]

In June 2003, Verizon Wireless backed an FCC-issued portability requirement that permitted consumers to take their phone numbers with them across carriers.[41] The company gained 1.5 million new subscribers the following quarter, partially due to the rule change.[42] In April 2004, the Dow Jones Industrial Average added Verizon Communications to its stock market index.[43] Verizon replaced telecom competitor AT&T, which had been a part of the index since the Great Depression.[43]

On December 22, 2004, mail servers at Verizon.net were configured not to accept connections from Europe by default in an attempt to reduce spam email that was originating from the region. Individual domains would only be unblocked upon request.[44]

In 2004, Verizon launched its Fios Internet service, which transmits data over fiber optic cables, in Keller, Texas.[45][46] The company launched Fios TV in September 2005, also in Keller. Twenty percent of qualified homes had signed up by the end of 2004.[47] By January 2006, Fios offered over 350 channels in eight states, including 20 high-definition television channels and video on demand.[47]

In 2005, Verizon launched VCast, a multimedia service that allowed people to download apps, music, ringtones, and videos.[48]

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