Wednesday, September 16, 2009

Verizon: Rethinking the Wireline Business with Internet Video in Mind

The FiOS architecture and Internet video competition have led to a fundamental rethinking of the wireline business, said Ivan Seidenberg, Verizon Communications' Chairman & CEO, speaking at Goldman Sachs Communacopia XVIII Conference. The new business model calls for high penetration of fiber, with video being the anchor product in Verizon's wireline bundle. As FiOS gains scale, this allows Verizon to begin eliminating central offices, eliminate call centers, garages and fundamentally restructure the company. More importantly, the goal is to enable the TV as an interactive communications/entertainment device. Then, the next step is to bundle it with wireless using a common software interface on all screens.


Seidenberg said his own thinking about the wirelline business "has sort of matured a little bit." He no longer sees the core video product of the wireline network running over a switched digital video architecture. Nor will it resemble anything else from a traditional telecom company. Instead, he sees Verizon delivering video with the same over-the-top model of Google and other Internet players. So, he believes Verizon must focus on driving fixed costs out of its wireline business as quickly as possible while driving up FiOS penetration.


Regarding the LTE rollout, Seidenberg confirmed that Verizon will launch its service by middle of next year with plus 30 markets, with 100 million POPs to be covered by the end of next year.


Archived webcast material is on Verizon's Investor webpage.
http://www.verizon.com

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