5G drives mobile-first SME growth for Verizon Business

Alex Doyle, Vice President of Product Management at Verizon Business, shares how the proliferation of 5G and selective partnerships underpin the telco’s SME strategy and why the time is right for “mobile-first” business solutions.

Like many telcos over the years, Verizon’s early SME strategy was not very sophisticated and consisted mainly of selling devices as if small businesses were like consumers. That changed in 2016 when the operator introduced One Talk, a cloud-based, mobile-first business phone solution. That’s when the telco shifted to what Doyle calls a “whole-stack mentality” for SMEs – that is, providing a range of relevant offerings beyond connectivity and devices.

In the past two years, the expansion of 5G and 5G fixed wireless access (FWA) has made the wireless network a “superior” foundation for SME services, he explains. Verizon’s higher capacity “5G Ultra Wideband” service is available to more than 200 million people in the US, which is about two out of three people in the country.

Verizon Business customers range in size from an 89-year-old grandmother with an Etsy shop to the largest US government agencies and multinational corporations. In this mix, small and medium-sized enterprises (SMEs) are an important segment for driving B2B revenue growth, but the diversity of customer requirements is a challenge for delivering solutions profitably.

“Whether it's a new company that's starting or a company that's growing, we'll say it makes sense for you to migrate your WAN either from old TDM or cable to a 5G access point. It's super powerful…and economical. Your cost of transmitting bits is a game changer,” says Doyle. Customer endpoints should also be wireless, whether they are smartphones or a desk phone with a cellular chipset, so there is no “crawling under your desk” to plug in phones or routers, he adds.

Verizon’s SME portfolio comprises the connectivity and devices; security; and unified communications, collaboration and call center solutions. Above all that sits a range of IT services – such as billing support services, workforce management, expense tracking – that are available via a marketplace.

“SMEs are looking to us to be their single source for all of these things,” says Doyle.

For Verizon Business, SMEs are companies with fewer than 100 employees. Within that, the operator breaks out two sub-segments: companies with fewer than 20 people and those with fewer than five. The telco’s other business segments include mid-market organizations with 100 to 1,000 employees and enterprises with more than 1,000 people. The operator has one product team, led by Doyle, that supports all business customers and tunes products and features based on the sub-segment.

A demanding partner

Verizon Business is selective when it comes to partnering to create SME offerings. The telco has a small set of strategic partners that includes Cisco, Microsoft, NICE and Genesys.

“Verizon is a demanding partner to these companies because they’re not just selling an over-the-top service…they have to interconnect to our mobile network and we set a high bar for security and reliability,” says Doyle.

The resulting SME propositions use Verizon’s brand rather than the partners’. An example is Verizon Mobile for Microsoft Teams, which integrates mobile calling with Microsoft Teams using Teams Phone Mobile. Verizon launched the offering in January and it is Microsoft’s first, and currently only partner, in the US to enable this capability.

“It’s ridiculously simple for the customer, but it was quite complex under the hood to make that happen. We don’t want the Teams experience to be just an over-the-top app, and neither does Microsoft,” he says.

Managing margins for diverse customer needs

A common challenge for telco SME ambitions is how to serve small businesses profitability. Their requirements are diverse, they usually do not have in-house IT expertise and need quite a bit of support with using new apps and tech, which can eat away at telco B2B margins.

Verizon tackles this by keeping costs down in a couple of ways, according to Doyle. First, it has a large sales force via the telco’s nearly 1,500 retail stores and door-to-door operations, that focuses on selling the basic offerings. Meanwhile “an elite SWAT overlay team” of specialists focuses on the more complex IT solutions. Organizing the sales efforts in this way “helps to manage costs”, says Doyle.

The other aspect is how Verizon curates the marketplace. It does not offer seven varieties of the same product because that would “create a race to the bottom” and be more like a simple reselling operation. Rather, the telco wants offerings that “integrate with us in a special way so we’ve got some value…We’re not just reselling, we’re doing something that’s unique,” says Doyle.

Riding a wave of new businesses

The coronavirus pandemic was a shock to the economy for businesses large and small. But it also created conditions for a resurgence in new business launches. In 2021, the US Census Bureau reported a record-high 5.4 million new business applications, and in 2022, the number of applications was 5 million. That means the addressable SME market has gotten bigger.

Doyle says a lot of the new businesses cropping up are bricks-and-mortar and not just professional services or start-ups working from home. Whether they are pizza shops, nail salons or hardware stores, there is a kind of “reset” happening where people “want to go to communities and go shopping” in physical stores, he says.

“These are all new businesses for us,” says Doyle. At the same time, the pandemic instilled “work from anywhere in a way that is not going to go away”, he adds, concluding: “The spirit of innovation and growth is always coming from entrepreneurial, small companies.”