Will Verizon’s New Plan Affect Its Market Share?

Previously in this series, we learned about Verizon’s (VZ) recently launched new plan. At the Oppenheimer 18th Annual Technology, Internet & Communications Conference held on August 11, David Small, Verizon Wireless’s COO, talked about the competitive positioning of Verizon’s new plan. He said, “From our vantage point, look, we’ve always been a premium brand and our expectation is consumers or our knowledge – the reality is consumers value the things that we do and the capabilities that they have and the coverage where and when and in the data throughputs and capacity that they need. We think consumers will continue to be attracted to this.”

The carrier does indeed leverage the strength of its best-in-class network to attract and retain wireless customers. Verizon had the top network performance among the top four US wireless players in 2H14.

According to RootMetrics’ 2H14 national results, Verizon had the best overall network performance when compared with AT&T (T), Sprint (S), and T-Mobile (TMUS). The carrier also won the top spot in all the categories, except text performance. In terms of network speed, network reliability, performance during calls, and data usage, Verizon placed first in RootMetrics’ study.

RootMetrics gave Verizon the highest rating overall in its Metro RootScore Awards for 1H15. Verizon had the highest number of shared or won awards across all categories, excluding text performance. The company won 110 awards for overall network performance. AT&T, T-Mobile, and Sprint got 68, 27, and 7 awards, respectively, for service in the 125 most populated metro markets in the US.

You may consider diversified exposure to Verizon with the iShares Core S&P 500 ETF (IVV). IVV had ~1% exposure to Verizon as of July 31, 2015. Alternatively, you may consider the SPDR Dow Jones Industrial Average ETF (DIA). DIA had ~1.8% exposure to the telecom company at the end of July.