Verizon Wireless gained 2.1M net adds during Q4
The fourth quarter of 2012 was "the best fourth quarter in the history of Verizon Wireless," said Verizon Communications (NYSE:VZ) CEO Lowell McAdam, who credited the wireless operator's Share Everything plan for luring 2.1 million net additions to the carrier during the quarter, 30 percent of which were new to Verizon.
Share Everything, the operator's oft-controversial data-sharing price package, has worked out even better than the company hoped. "It's a big hit from the customers' perspective as well as ours," said McAdam, who made his comments during the 2013 Citi Global Internet, Media & Communications Conference in Las Vegas.
Though Verizon is not slated to announce its fourth-quarter earnings until Jan. 22, McAdam released a few pertinent metrics related to the wireless business. He said 85 percent of devices sold during 2012's final three-month period were smartphones, the latest generation of which are all LTE-enabled. "So we've seen our percent of LTE in our base go from 16 percent to 23 percent in one quarter," said McAdam.
Verizon is rolling out a new brand campaign called "Powerful Answers," so McAdam intends to highlight new technology solutions during his keynote at the 2013 International CES event on Tuesday.
Reviewing notes from his CES keynote from two years ago, McAdam said, "It strikes me how dramatically the network has changed over these last two years." Wireless, for example, had less than 1 Mbps of throughput, but that is now up to 10-15 Mbps. Cloud technology was only a vision two years ago, but now it is reality. "The power of the network has really changed dramatically, if not exponentially," he added.
During his CES keynote, McAdam will host Roger Goodell, NFL commissioner, and Paul Mascarenas, CTO at Ford, and discuss how communications technology innovations are changing their businesses.
Regarding technology advances, McAdam mentioned location-based advertising, which has become a touchy subject among privacy advocates. "We will be able to tell with LTE, your location within a store, so that a retailer can tell you five feet ahead of you on the left, and here's a coupon for it, is something you've bought in the past."
McAdam was asked about comments he made to the Wall Street Journal regarding Verizon's long-standing desire to acquire Vodafone's 45 percent interest in Verizon Wireless. "We've always been ready" to buy out Vodafone's stake, he replied. "I don't feel any great urgency to [do] anything preemptive here."
"We're very focused on expanding the business right now," he added.
Another topic addressed was unlimited wireless data pricing, which has become a differentiator for wireless operators such as Sprint Nextel (NYSE:S) and T-Mobile USA. In addition, smaller players such as MetroPCS (NYSE:PCS) and Leap Wireless (NASDAQ:LEAP) have long been aggressive on pricing. But McAdam said Verizon will not get sucked into competing on low tariffs. "That's not our sweet spot," he said, noting Verizon prefers to focuses more on premium postpaid customers.
He also predicted that rival operators will not be able to sustain their unlimited data packages, largely due to the impact of video consumption in a wireless environment.
McAdam said the U.S. mobile market can continue to thrive and referenced Japanese operator Softbank's pending $20.1 billion deal for 70 percent of Sprint. "Softbank could go to any country in the world and make an investment," he said. "They came to the U.S."
McAdam said having three or four strong carriers "is far better than two strong carriers and bunch of weak carriers that are having a hard time meeting their capital demands."
Verizon's chief executive was also interviewed by Reuters today, where he discussed T-Mobile's plan to eliminate subsidies on wireless devices. McAdam said he is open to that idea, but he added buyers prefer paying less up front for a device, even if that means they will have to pay higher service fees during a long-term wireless contract.
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