Question

Verizon and AT&T, what are the global risks and economic risks these two companies face and which company is more exposed to it?

Between these two companies which one has the best management team.

Answer 1

In terms of global risks both Verizon and AT&T face the risk of increased level of competitive pressure in the global markets. The markets in developed economies are saturated as these are mature markets and so companies like Verizon and AT&T will have to look at developing economies to maintain their growth momentum. However even though the markets in developing economies are growing rapidly there is risk from lack of properly developed regulatory framework and prevalence of low ARPU (average revenue per user).

In terms of economic risks both these companies face the risk of slow growth that will hit them due to an economic slowdown. Currently many economies across the globe are witnessing slow growth due to economic recession and this is being amped by uncertainties like US-China trade tension and uncertainty with regards to Brexit as well.

The company that is more exposed to the risks is Verizon. This is because Verizon can potentially lose the 5G battle to AT&T. Verizon chose the wrong type of spectrum to accelerate its 5G aims and this has exposed it to unwarranted risks.

Between the two companies it is certainly AT&T that has the better management team. The team is more aligned to the company’s vision and is taking systematic strategic steps to achieve their goals and objectives in an optimal manner.