March 31, 2017 / 12:57 PM / 4 months ago

Verizon hires ex-Ericsson CEO, sets new operating structure

A Verizon sign is seen at a retail store in San Diego, California, U.S. on April 21, 2016.Mike Blake/File Photo

(Reuters) - Verizon Communications Inc (VZ.N) said on Friday that Hans Vestberg, the former Ericsson chief executive officer, has joined the company and will lead a team building out its fiber network infrastructures amid growing competition from smaller rivals.

"It shows with Vestberg that they want to go back to having that network superiority, which has been increasingly eroded," said Roger Entner, an analyst at Recon Analytics.

The move also sets up Vestberg, 51, as a potential successor to Verizon Chief Executive Officer Lowell McAdam, he said. The No. 1 U.S. wireless carrier said Vestberg will initially be based in Sweden but join the U.S.-based team later this spring.

"What bringing someone in for the outside means is you need a new perspective," Entner said.

Verizon also said it is restructuring operations into three areas including Vestberg's team. The media and telematics unit will focus on new businesses in digital media, including integrating its pending acquisition of Yahoo Inc YHOO.O. It will be led by Marni Walden as executive vice president for media and telematics.

The customer and product operations team, led by John Stratton, will work on operating and growing Verizon's established businesses, such as Verizon Wireless and Verizon Enterprise Solutions.

Walden and Stratton are also both seen as potential successors to McAdam, according to industry analysts.

Vestberg was CEO of Ericsson (ERICb.ST)(ERIC.O), one of the world’s largest equipment suppliers to the telecommunications industry, for six years. He was ousted last year amid pressure from shareholders unhappy with financial results amid pressure from Finland’s Nokia (NOKIA.HE) and China’s Huawei[HWT.UL].

Ericsson is working with Verizon on trials for a next-generation 5G network, and Vestberg and McAdam have known each other for years, industry watchers said.

Additional reporting by Anya George Tharakan in Bengaluru; Editing by Sriraj Kalluvila and Jeffrey Benkoe

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