Verizon's Mission of Self-Destruction

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Customers and investors increasingly are wondering why Verizon and Verizon Wireless are hurting themselves with their actions.

Following are three examples that illustrate how these companies are causing themselves long-term damage.

Verizon decided to battle its own striking workers on the public stage. That battle shed lots of bad blood, and it will be tough to close those wounds. Many companies experience strikes, but most are settled quickly and quietly. That's the secret. However, over the last decade or two, every time Verizon workers' contracts have come up for renewal, the process has been longer, uglier and messier.

Both sides' positions are understandable. On the employee side, there's the need to keep up with the rising costs of living. On the company side, there's the need to remain competitive, as new companies and new technologies change the playing field.

Unfortunately for workers, times change. Just as the horse and buggy industry gave way to the automotive industry, things change. Workers can stress a company so badly that it ends up closing, and everyone loses big time.

Just think of the recent Hostess story. Workers demanded more from the company than the company could afford. Bottom line: Hostess went out of business. All the workers became unemployed. That is the bottom line every union worker needs to understand. Companies are not invincible.

Hostess was acquired by another company, which gave the brand new life. However, the Hostess of today is now free from unions and doesn't face the same type of worker demands. So, as much as we can all understand worker demands, they must be balanced with reality.

The Verizon strike and the estrangement of its workers planted seeds of distrust and a hard, cold reality into the marketplace -- something that will fester and grow. While past strikes quickly faded away, the damage to Verizon's reputation was more serious this time. If the next strike lasts as long, it will damage the company even further.

The fear is that this festering will have an ongoing impact on investor confidence, business customers, consumers and workers. Verizon has allowed this issue to take a disturbing direction.

Verizon customers have taken it on the chin in recent years. For example, after a recent hurricane leveled a town, Verizon didn't reinstall phone service -- instead, it forced users to choose wireless.

While this is a trend that indicates the way the industry will move in coming years, it will take many years to get there. Some customers are OK making the switch early. Others don't want to make the switch at all. Not yet anyway. Nevertheless, they are being forced into a corner to do something uncomfortable to them.

Changes like this must take place at a slower pace. You must turn the screwdriver of change slowly, or risk breaking the screw. In my opinion, Verizon is breaking the screw. It is negatively impacting its relationships with customers by showing no respect or consideration for them.

The Verizon problem, as I see it, is that the company doesn't seem to care about people --workers or customers. Rather than letting customers change services when they are ready, they are being forced to change now.

A third example is the way customers say Verizon comes in to fix a phone line problem. They simply replace the POTS telephone service with something else. When they are done and have updated the customer to a digital product, then they surprise the customer telling them what they just did. That is not something many customers want -- yet Verizon is forcing the switch.

The choice Verizon gives the customer is either to accept its new service or go without. It doesn't really care one way or the other. Customers who do not accept simply will have no landline phone.

This very customer-unfriendly approach is chipping away at the core strength of the company -- and Verizon is its own chipper. I understand the changes the company wants to make. It wants to go in the direction the industry is heading in.

However, forcing customers to change too fast will hurt Verizon. Turning the screwdriver too quickly will cause problems with customers tomorrow. Now that there is growing competition, other companies will take away more of Verizon's market share.

It's not too late for Verizon to change and be the friendly company it was -- but to tell you the truth, I don't think it understands the damage it is causing. In the next few years, as it runs into problems with its customers, those issues will be directly related to the damage Verizon is causing itself today.

E-Commerce Times columnist Jeff Kagan is a wireless analyst, telecom analyst, industry analyst, consultant and speaker who has been sharing his colorful perspectives on the changing industry for 25 years. Email him at jeff@jeffKAGAN.com.

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