Yahoo Finance Why Verizon just made a big investment in America amid the coronavirus: CEO
Verizon Communications CEO Hans Vestberg has stepped up with a big investment into an America reeling from the debilitating effects of the coronavirus outbreak.
The communications and media giant recently unveiled a $500 million increase to its capital expenditure spending this year to support investments in its network infrastructure. Verizon will now spend a total of $17.5 billion to $18.5 billion in capital expenditures this year, compared to $17 billion to $18 billion previously.
At first blush, the move appears to be counterintuitive as the U.S. economy grinds to a halt. But as investors learned during the 2008-2009 financial crisis, those with the balance sheets to invest during a crisis stand to take market share as the economy recovers.
That played a part in Vestberg’s thinking.
“We have a really robust network, but we also wanted to be prepared if we need to do more to keep that high quality that Verizon has because that is the expectation for our customers regardless of the times,” Vestberg said on Yahoo Finance’s The First Trade. “We are a responsible company, we want to show we are investing in this country even in these tough times. I think it’s a responsibility for companies the size of Verizon to do investment in these times.”
In the case of Verizon, the network investment is vital as more people work from home amid the coronavirus pandemic. Helping them get faster download speeds to communicate with work and family members is more important than ever before.
If a Verizon could meet the demands of a nervous public right now, it may go a long way to strengthening subscriber loyalty ahead of a nationwide roll out of 5G.
Verizon Communications is the parent company of Yahoo Finance.
Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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