Verizon Eyes Combined Wired-mobile Services, Won't Go Into Canada
The carrier sees video, cloud and commerce opportunities from buying out Vodafone's stake for $130 billion
Tue, September 03, 2013
IDG News Service (San Francisco Bureau) — Verizon Wireless has no plans to expand into the Canadian mobile market, the head of its parent company said on Tuesday in the wake of a deal to bring all of the wireless subsidiary under Verizon Communications.
Verizon is focused on finishing the proposed US$130 billion deal with Vodafone Group and taking advantage of opportunities in video, mobile commerce, cloud services and other areas for a fully merged wired and mobile carrier, Chairman and CEO Lowell McAdam said on a conference call Tuesday.
In fact, the company was never as serious about competing in Canada as news reports had claimed, he said. Reports earlier this year had said the company might buy a Canadian mobile operator, setting off a storm of protest from that country's major carriers.
"It was always on the fringe for us," McAdam said. The company's planned "One Verizon" strategy with wired and wireless assets under one roof offers chances for much better returns than a Canadian mobile business would have, he said. "That's off the table at this point."
The One Verizon vision is at the heart of the Vodafone deal, McAdam said. Buying out Vodafone's 45 percent stake in Verizon Wireless will start to boost revenue immediately after completion of the deal, which is expected in the first quarter of next year, according to the company. The move may create some synergies, but its point is not to cut costs, McAdam said.
McAdam pointed to combined fixed and mobile capabilities several times during the call, without giving many details. But he cited some examples of areas where having both under the same roof might allow for new service offerings or features.
Verizon has made significant investments in new technologies on its wireline side and could make even better use of them across both the wired and wireless realms, McAdam said. Those investments include Verizon's acquisitions of cloud services company Terremark, managed security vendor Cybertrust and fleet management company Hughes Telematics. Merged with mobile services, those technologies could help Verizon serve industries including health care and energy, he said.
"We see it as clearing the road, if you will, for us to aggressively go after these market opportunities," McAdam said.
The deal could help Verizon pursue services beyond traditional one-to-a-customer phone contracts, leading to what may eventually be 500 percent market penetration for mobile, with many more devices than individual customers, McAdam said.
Verizon and U.K.-based Vodafone had once discussed the possibility of merging into one big international mobile operator but decided that wouldn't make sense for the companies' shareholders, McAdam said. However, with an already large international presence that includes 35 cloud data centers worldwide and services in 150 countries, Verizon may selectively make international investments if they enhance shareholder value, he said.