Verizon Strike Signals Shift in Telecom Business

A attain away two unions at Verizon Communications announced Sunday could signal the go of a tall clamber between wireline workers and companies in the telecom diligence, some analysts said.

The strike, by members of the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers, affects Verizon's wireline services in the Northeastward and Middle Atlantic. The 45,000 workers serve a wireline division at Verizon that's shrinkage atomic number 3 many old customers ditch their traditional sound armed service for mobile operating theater VoIP plans."If we take Verizon's face, they'atomic number 75 seeing business in terminal decline," said telecommunication analyst Roger Entner, break of Recon Analytics. "On the other manus, you have employees WHO want to feed a family. They are used to certain rights, certain expectations and a standard of life."

Entner sees this rap as the first round of a longer fight between wireline unions and large telecom carriers as the companies focus less on conventional phone company and Thomas More on mobile, broadband and goggle bo services, he said. "I'm surprised it took this long for these struggles to show up," Entner said. "They're at the beginning, not the end, of this struggle."

The fall upon represents a shift in the U.S. telecom business, added Jeff Kagan, an independent telecom analyst. Carriers "have to take the changing marketplace and adjust," he said. "Unluckily, that means some workers give to take a hit, but if Verizon does not adjust, then every last workers will take a bigger hit when Verizon loses business, ascribable costing overmuch."

At Verizon, a big interrogative is whether the company's growing mobile business should subsidize the shrinking wireline business, Entner said. Complicating the outcome is the fact that Vodafone Group owns 45 percent of Verizon Wireless.

"Should Vodafone subsidise Verizon's wireline side?" Entner aforesaid. "I think both Verizon and Vodafone would say, 'Absolutely no.'"

The two unions reason that Verizon, American Samoa a whole, is highly profitable. In the second quarter, Verizon reported net income of United States$3.6 billion, and the company reported its strongest year-over-yr revenue growing in 10 quarters.

Verizon added 2.2 one thousand thousand mobile customers during the quarter, and moveable revenue was $17.3 billion, high 10.2 percent from a class to begin with. Wireline revenue born 0.3 pct, although that's a significantly smaller decline than in various recent quarters. In the previous six living quarters, wireline revenue declined between 2 percent and 4 pct, compared to the year earlier.

The unions renowned that Verizon Wireless paid out $10 billion to Verizon and Vodafone in January. Verizon's top five executives received $258 meg in recompense complete the past four years, the unions aforementioned.

Workers bequeath return when Verizon shows it's willing to "buy seriously," the unions said. "Since bargaining began on June 22, Verizon has refused to move from a long list of concession demands," the CWA said in a handout. "A the contract expired, nearly 100 concessionary company proposals remained flexible."

Verizon said Sunday that customers should see little difference in service. The company has trained "tens of thousands" of management employees, retirees and other workers to fill in, the company said.

Some Kagan and Entner said they expect the two sides to function out a compromise. Neither side is being unreasonable, Entner same.

"Verizon isn't doing it because they're stand for, hardhearted bastards," helium added. "The unions aren't doing it because they're resister and esurient. But the backdrop is, the business is vanishing."

Grant Gross covers technology and telecommunication policy in the U.S. government for The IDG News Service. Keep abreast Subsidisation on Twitter at GrantGross. Grant's electronic mail address is grant_gross@idg.com.

Source: https://www.pcworld.com/article/481692/verizon_strike_signals_shift_in_telecom_business.html

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