Ivan Seidenberg

Exec Pay: Who makes what in wireless?

Wed, 12 Mar 2008 07:59:59 -0400

Exec Pay: Who makes what in wireless?

Few issues stoke the ire of workers like executive pay. The average CEO of Standard & Poor's 500 company list made $15.06 million in 2006, which is the most recent year for executive compensation figures. The ten U.S.-based, public wireless company CEOs whose pay we tracked averaged about $18.34 million in 2006. Only half of them are on Standard & Poor's 500 list.Ã‚Â

Because every company has their own nuanced approach to executive compensation, we tried to make it easy and follow the new 2006 rule that the SEC requires public companies to disclose total compensation, which includes salary, bonus and "other" compensation. The "other" compensation category includes vested restricted stock grants and "stock gains," the value realized from exercising stock options during the past fiscal year.

Just today AT&T announced its executive compensation figures for 2007. Chairman, president and CEO Randall Stephenson, who took over from Ed Whitacre Jr., received total compensation of close toÃ‚Â $22 million. President and CEO of AT&T Mobility Stanley Sigman received compensation of $36.9 million, before he retired at year-end. Ralph de la Vega, who took over for Sigman, received $12.4 million in 2007.

Whether it was because of retirement or a forced resignation, some of the CEOs in our top ten list--Sprint Nextel's Gary Forsee, Motorola's Ed Zander and AT&T's Ed Whitacre Jr.--are no longer at their posts. Take a look back at what these executives and their still-gainfully-employed colleagues made back in 2006. How much does it cost to retain a wireless leader? Here are ten answers that brought varying degrees of success. Click here to see the start of the report, or select a name below. -Brian

Ed Whitacre Jr., AT&T CEO

Paul Jacobs, Qualcomm CEO

Ivan Seidenberg, Verizon CEO

Gary Forsee, Sprint Nextel CEO

Scott Ford, Alltel CEO

Ed Zander, Motorola CEO

Mike Zafirovski, Nortel Networks CEO

Michael Gallagher, FiberTower CEO

Doug Hutcheson, Leap Wireless CEO

Steven Dussek, Dobson CEO

Economic slowdown to affect Verizon Wireless

Tue, 11 Mar 2008 07:59:58 -0400

While we reported yesterday that Verizon CFO Doreen Tobin assured analysts that Verizon Wireless' revenue growth would remain strong, recent reports note that Toben also hinted that an economic downturn is having a small effect on its wireless business.

"There are pockets of the country, particularly in the Midwest" where some consumers affected by the mortgage crisis are having some trouble paying their bills, Toben told attendees at a Bear Stearns conference. Toben also echoed CEO Ivan Seidenberg's comments last month regarding the carrier's new $99-a-month unlimited plan is off to a good start: "We're seeing a great early response already, with many customers willing to move up on price."

For more on Toben's comments:
- read this article from the WSJ (sub. req.)

Related:
The Flat-rate Revolution Editorial
Carriers offer unlimited plans Video

Verizon CEO: We're talking to Qwest

Wed, 27 Feb 2008 06:59:58 -0500

Yesterday Qwest announced that its deal with Sprint was not profitable enough, and now Verizon chairman and CEO Ivan Seidenberg admitted that his company was in talks with Qwest to step in and ink a deal. According to a report in the Wall Street Journal, the Sprint deal also restricts Qwest from offering the latest handsets available, which is another factor that has led Qwest to seek a new partner (or better deal with Sprint) once the existing deal expires next year.

Instead of buying wholesale minutes from Sprint and reselling them like an MVNO, Qwest could earn commission for selling branded Verizon Wireless service.

For more on the potential deal:
- read this article from the WSJ (sub. req.)

Sound Off - Industry Insiders on Unlimited Rate Plans

Tue, 26 Feb 2008 12:20:39 -0500

Here's what members of the wireless industry are saying about Verizon Wireless, AT&T and T-Mobile USA all announcing on Feb. 19 that they would offer consumers an unlimited rate plan at $99 per month. Sound off on your own opinion in our comments section below.

"We believe in unlimited. We believe we were the first with an unlimited rate plan with our My Circle 10 rate plan.

"The sweet spot for wireless voice is around $50 per month. We weren't maximizing the potential of My Circle by having entry point of $59 so we lowered it to $49. That's where the action will be." -- Frank O'Mara, chief marketing officer, Alltel

"When we announced it [the unlimited voice plan for $99 per month], we were on airwaves and on radio. We also sent out mailers about it. So our approach was 60 to 90 days in the making. We timed this to be first to market."

"There's been a lot of hullabaloo about flat rate but few customers have rate plans over $99. There is some revenue risk to some customers."

"We think that our network has significant differentiation. All carriers say that but if you talk to firms that do research, we have an advantage. We are in a greater position to attract customers in that range. The early results are great. Our stores are seeing excellent reaction to it. A couple other carriers announced unlimited plans. I suggest you go to their stores and ask what they are. They are different. The announcement was the same but they are different." -- Ivan Seidenberg, chairman and CEO of Verizon Communications speaking at a Merrill Lynch Communications conference in New York on Feb. 26.

"Unlimited is the right value proposition for us and for the customer. We have had regional players come into unlimited space in the past years but generally haven't seen the bigger carriers do it. We haven't seen this [the unlimited rate plans for $99 per month] as a particular threat because of pricing differential." -Greg Lund, spokesman for Leap Wireless.

"What we are seeing is the beginning of the flip-flopping of fixed-rate services from data to voice and the pay-for-use model being deployed in the data world. This makes a lot of sense to me since data uses a lot more bandwidth than voice and bandwidth is shared-which means there is a finite amount per cell sector.

"I think Verizon started the unlimited voice pricing high enough that it has room to move it lower in response to the pricing war this is certain to set off. In the airline business, when one airline raises a price, the other airlines match that price. In wireless, however, when a network operator lowers a price or comes out with a new plan (family plan, buddy plan, etc.) the other operators try to outdo the first operator. For example, AT&T came up with rollover minutes.

"Thus, this is only the first foray into new pricing models this industry will witness in the coming months and years. Buckets of minutes will give way to unlimited minutes, the cost for unlimited minutes will come down and we are likely to see pricing per person and per family, which will include multiple devices used by the same person or within the same family. By the way, Verizon was the first to say that this unlimited plan is probably not right for most families who share minutes and pay less for each additional device, but it might be right in some cases. That does not mean there won't be other unlimited pricing plans for families and friends in the near future." --Andrew Seybold, founder and principal of Andrew Seybold Inc.

VZW: Excellent reaction to unlimited plan

Tue, 26 Feb 2008 06:59:57 -0500

Speaking at a Merrill Lynch Communications Forum this morning in New York, Verizon Communications Chairman and CEO Ivan Seidenberg told investors that the early results from last week's announcement by Verizon of an unlimited rate plan for $99 per month have been great. "Our stores are seeing an excellent reaction to it," Seidenberg said.

He also encouraged everyone to go to the stores of competitors AT&T and T-Mobile USA to evaluate their unlimited $99 per month plans that were announced immediately following Verizon's news last week. "Go to their stores and ask what they are. They are different. The announcement was the same but they are different."

Seidenberg also said that the company had its unlimited plans in place for 60 to 90 days prior to the announcement on Feb. 19 and that's why the company was able to immediately market it to customers. "We timed it so that we were the first to market with this," he said.

But the company doesn't expect the flat-rate plan to have a lot of impact on its bottom line. "There's been a lot of hullabaloo about flat rate but only a few customers have plans over $100 per month," Seidenberg said. And he added that the company's research indicates that Verizon would be in a greater position to attract new customers at that price range with the unlimited plan. -Sue

Related stories:
Video: Carriers offer unlimited plans
Verizon goes flat-rate. Story
Flat-rate Revolution. Opinion

Verizon Wireless to trial and deploy LTE

Thu, 29 Nov 2007 06:59:58 -0500

Verizon Wireless has announced that it will deploy Long Term Evolution (LTE) technology for what it calls its 4G network. Verizon and Vodafone, the co-owners of Verizon Wireless will coordinate a trial of LTE using equipment from Alcatel-Lucent, Ericsson, Motorola, Nokia-Siemens and Nortel. The carrier is also in talks with handset makers like LG, Samsung, Motorola, Nokia and Sony Ericsson and other consumer electronics companies, which anticipate embedding wireless functionality in future products.

"Today's 4G announcement, coupled with our Open Development initiative announced earlier this week present a major growth opportunity for Verizon Wireless," said Doreen Toben, chief financial officer of Verizon. "Fourth generation's higher data speeds will usher in a new era of wireless applications and appliances, all of which can benefit from connecting to the nation's premier wireless network."

Back in September, Vodafone CEO Arun Sarin and Verizon CEO Ivan Seidenberg announced at the Goldman Sachs investor conference that both carriers were planning on using the same technology for their 4G networks and that both are studying the LTE standard. "It makes complete sense for us to go from HSDPA to LTE and it makes sense for Verizon to go from EV-DO to LTE." Sarin said at the time. Shortly afterward, however, Verizon Wireless began downplaying the remarks and even hinting that it was looking at WiMAX.

For more on Verizon's LTE announcement:
- read this press release

Verizon picks LTE? Not so fast.

Mon, 24 Sep 2007 06:59:59 -0400

Verizon picks LTE? Not so fast.

It's still early to declare Long Term Evolution (LTE) technology as the 4G winner at Verizon Wireless. Last week, Vodafone CEO Arun Sarin and Verizon CEO Ivan Seidenberg announced at the Goldman Sachs investor conference that both carriers are planning on using the same technology for their 4G networks and that both are studying the LTE standard.

"It makes complete sense for us to go from HSDPA to LTE and it makes sense for Verizon to go from EV-DO to LTE." Sarin said.

But the devil is in the details. Interestingly, Verizon Wireless somewhat distanced itself from the initial announcement. An operator spokesman told Telephony Magazine that neither company has committed to a specific technology and they are not locked in deploying the same infrastructure after their 4G evaluations are complete. Both companies are looking at WiMAX too.

Certainly aligning technology paths has been a long-time desire for both Vodafone and Verizon, who own stakes in Verizon Wireless (45 percent and 55 percent, respectively). Vodafone makes use of GSM and HSDPA and Verizon Wireless has deployed CDMA and EV-DO Rev. A. That makes global offerings and network procurement savings difficult. Plus, Vodafone has been under significant pressure to divest its stake in Verizon Wireless as investors say there is little synergy.

Verizon Wireless wanted a harmonized standard for 3G back in the 1990s, but vendor politics left two incompatible standards: CDMA2000 and W-CDMA. Now there is a new opportunity for alignment again with 4G as a move to LTE, Ultra Mobile Broadband (UMB), the evolution path for EV-DO Rev. A, or WiMAX would require a fork-lift upgrade since all are based on OFDMA technology.

Still, many factors could keep Verizon Wireless from technologically aligning itself with Vodafone. Whether Verizon Wireless wins spectrum in the 700 MHz auction has a bearing on technology decisions given the fact that it will face buildout deadlines and competitive pressures from WiMAX. Moreover, LTE is about three to four years away from deployment. UMB's development is further along and could very well be ready significantly earlier than LTE. If Verizon is facing competitive pressure on the mobile broadband front, especially from the likes of Sprint's WiMAX network, it could find itself pushed to deploy UMB. It also could find that EV-DO Rev. B will give it enough speed until LTE is ready. Vendors expect that a 5 MHz Rev. B channel will support average downstream rates of 9.3 Mbps, representing an improvement over Rev. A by three times. Of course, there's always WiMAX.

On another interesting note, did you notice the flurry of announcements Ericsson has made around making HSPA more of a mass-market technology? The world's largest infrastructure provider, which has publicly shunned WiMAX, appears to be looking to accelerate the adoption of HSPA before WiMAX shows up in force.

Last week, the vendor announced its first HSPA module for laptops and other client devices, aiming for 50 percent of notebook computers to adopt HSPA modules by 2011. In India, where WiMAX is supposed to make some significant inroads, Ericsson launched an initiative to introduce the benefits of HSPA technology in rural India and connect communities to high-speed Internet services. Earlier this month, Ericsson introduced the U335 WCDMA mobile platform designed to enable handset providers to create mass-market HSPA multimedia devices capable of offering services such as mobile TV, mobile video blogging and other services that require both high uplink and downlink data speeds.
-Lynnette

Verizon committed to LTE

Fri, 21 Sep 2007 06:59:58 -0400

Vodafone CEO Arun Sarin and Verizon CEO Ivan Seidenberg announced at the Goldman Sachs investor conference this week that both carriers are planning on using the same technology for their 4G networks and that both are working on the LTE standard. While both Vodafone and Verizon own stakes in Verizon Wireless (45 percent and 55 percent, respectively), Vodafone uses different technology than Verizon Wireless does in its networks overseas. Vodafone makes use of GSM and HSPA, while VZW has deployed CDMA and EV-DO Rev. A, but these technologies are not compatible--making it impossible for the companies' subscribers to roam on each others networks while travelling.

"It makes complete sense for us to go from HSDPA to LTE and it makes sense for Verizon to go from EV-DO to LTE." Sarin said. The CEO said it would be another three or four years before LTE could be deployed.

For more on Verizon Wireless and LTE:
- read this article from Unstrung

Verizon Wireless income up, buys RCC

Mon, 30 Jul 2007 06:59:58 -0400

Verizon Wireless added 1.3 million net new subscribers during its second quarter, just shy of the 1.5 million net subs AT&T added. Verizon Wireless ended the quarter with 62 million subscribers, up from 54.8 million a year earlier and second only to AT&T's 63.7 million subs. Verizon Wireless' revenue, however, topped AT&T at $10.8 billion, compared to $10.4 billion for AT&T. VZW also beat AT&T when it came to churn: VZW's 1.08 percent churn rate is much lower than AT&T's 1.6 percent. The carrier's ARPU rose 3 percent to $51.84.

Verizon also announced that it would acquire Rural Cellular (RCC)Ã‚Â for $2.67 billion, a move that echoes AT&T's recent acquisition of Dobson Communications for $2.8 billion. RCC operates in the 850 MHz band and has been looking to sell its assets by this weekend, according to Verizon CEO Ivan Seidenberg. Seidenberg said Verizon has been tracking the company for some time and believes the deal will make for aÃ‚Â "meaningful expansion of our footprint as well as improve service for existing Verizon customers." Seidenberg also predicted that the deal will save the company more than $1 billion in synergies in reduced roaming and OPEX expenses. RCC's customer base is 716,000 and it operates in about 15 states.

Seidenberg noted that RCC "operates both GSM and CDMA networks. Our plan would be--just to make sure there is clarity about it--to build an overlay CDMA network to convert their existing customers to CDMA, but we will continue to operate the GSM network to service the needs of the GSM operators that roam on that network."

For more on the carrier's announcements:
- read this press release on its Q2
- and read this release about the RCC deal