Verizon's Shammo: We have enough spectrum for 4-5 years
Verizon Communications (NYSE:VZ) CFO Fran Shammo said that Verizon Wireless now has enough spectrum to handle its capacity needs for the next four to five years. He called the carrier's recently approved $3.9 billion purchase of nationwide AWS spectrum from a group of cable companies "an absolute strategic acquisition for us."
Speaking at the Goldman Sachs Communacopia Conference, Shammo said there is now no real urgency for the next four to five years. That said, he noted that over time as usage on the carrier's EV-DO network declines, Verizon will start repurposing some of its 3G spectrum for LTE service. Shammo was speaking in place of Verizon Communications CEO Lowell McAdam, who had been scheduled to appear at the conference.
The Verizon finance chief said that by mid-2013 the company will have filled in its 3G coverage footprint with LTE service using its 700 MHz spectrum. At that point, he said, Verizon may start deploying its AWS spectrum for LTE in certain cities.
The comments are notable in light of a March Verizon FCC filing, made in support of the deal with the cable companies, where the carrier stated that its current spectrum holdings "will not provide sufficient capacity to meet the growing demand for mobile broadband--4G, in particular--by 2013 in some areas and by 2015 in many more."
In other spectrum news, Shammo said Verizon will participate in the upcoming incentive auctions for broadcast TV spectrum. He also said it is too early to discuss details of Verizon's planned sale of its 700 MHz Lower A and B Block spectrum--which Verizon said it would sell if the cable deal was approved by regulators--but he said the sale likely would take a year to be completed.
Shammo also touched on the company's Share Everything shared data plans, which Verizon introduced in late June. The plans, which initially confused and angered customers worried about losing their unlimited data plans, have proven more popular than Verizon predicted, Shammo said, though he declined to provide specific figures. He said more consumers are moving from unlimited plans to shared plans and are attaching more devices than Verizon had expected. That, in turn, will lead to more revenue over time for Verizon, he explained, as usage increases. He said that once customers realize that they don't use as much data as they thought they did, "unlimited is just a word and doesn't mean anything."
Verizon does not require existing customers to switch to its shared plans. However, Verizon has said that customers who were grandfathered into its unlimited data plans and want to upgrade to a new smartphone at a subsidized price will need to pick a voice plan with a standalone, usage-based data package or one of its Share Everything shared data plans.
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