Analyst Urges Patience as Verizon Navigates Major Strategic Turnaround
New York, Thursday, 29 January 2026.
Despite investor impatience, analysts warn it is premature to judge Verizon’s pivot. The strategy hinges on a newly finalized $20 billion acquisition targeting a massive 40% reduction in customer churn.
Leadership Under the Microscope
Industry analyst Jeff Kagan advises investors that it remains too early to definitively judge Verizon’s (VZ) earnings performance under the leadership of new CEO Dan Schulman [1]. Schulman, who was appointed in October 2025, inherited a telecommunications giant that has struggled to demonstrate sustained growth in recent years, leading to understandable impatience among stakeholders [1]. However, Kagan argues that the strategic pivot currently underway requires time and space to generate momentum, suggesting that the true impact of the recovery plan is not yet visible in the immediate financial data [1]. This caution comes as the market prepares for Verizon to announce its fourth-quarter results on January 31, 2026, following a challenging year where the company lost customers in each of the first three quarters of 2025 [3].
Betting Big on Convergence
Central to Schulman’s turnaround strategy is a massive bet on “convergence”—the bundling of fiber internet with wireless services. This strategy was solidified on January 20, 2026, when Verizon finalized its $20 billion acquisition of Frontier Communications [2][5]. The deal, which was approved by California regulators on January 15, 2026, integrates Frontier’s network to create nearly 30 million fiber passings across 31 states and Washington, D.C. [5]. The economic logic behind this merger is driven by retention data: customers who subscribe to both mobility and fiber services exhibit a churn rate that is nearly 40% lower than those with traditional mobility plans [5]. With Verizon reporting a churn rate of 0.91% in the third quarter of 2025, applying this reduction suggests a potential churn rate of approximately 0.546% for converged subscribers [5]. Currently, only 18% of Verizon’s consumer postpaid phone customers utilize a converged offering, highlighting a substantial cross-selling opportunity [5].
Operational Overhaul and Financial Health
To support this strategic shift, Verizon has executed significant operational changes, including a workforce reduction of approximately 13,000 employees in late 2025 intended to generate between $4 billion and $8 billion in annual cost synergies [2]. Despite these upheavals and the heavy capital expenditure required for network expansion, the company has maintained its commitment to shareholder returns. Verizon raised its dividend in September 2025 for the 19th consecutive year and currently offers a yield near 7% [4][5]. The company also reported progress in deleveraging, ending the third quarter with net unsecured debt of $112 billion, a decrease of $9.4 billion year-over-year [5]. This represents a reduction of approximately 7.743% in its unsecured debt load compared to the previous year.
Market Sentiment and Competitive Landscape
Despite these maneuvers, market skepticism persists regarding the company’s growth potential, reflected in a forward price-to-earnings (P/E) ratio of approximately 8.4 [4]. Analysts view Verizon as a “show-me” story for 2026, looking for concrete evidence that the integration of Frontier and the new “value-pivot” strategy can reverse the trend of subscriber losses [2]. In the broader competitive landscape, fears of a renewed price war with rivals AT&T and T-Mobile appear unfounded. While Verizon introduced a promotional deal in December 2025 offering four lines for $100 and free iPhone 17 units, analysts generally dismiss the likelihood of aggressive price competition, noting that the company is opting for a modest approach to gain subscribers rather than eroding margins [3].