Verizon warm on iPhone deal, cool on Vodafone merger
Verizon CEO Ivan Seidenberg is very interested in an Apple device partnership for its network, but has no plans to pursue a merger with Vodafone, he said in a recent interview.
In a Council on Foreign Relations speech, Seidenberg said his company had approached Apple about securing iPhones or iPad distribution agreements for its Verzion Wireless network.
“We have expressed to Apple an interest in doing it; we have explained that our network is capable of handling it, he said. “Our view is we'll get to carry the Apple standard when Apple's ready to make that decision.”
Asked whether Verizon has chosen to back Google in the Apple-Google rivalry, Seidenberg said he saw room for relationships with both. “Networks should be neutral to anybody's device, and we want to carry anybody's device,” he said.
Seidenberg also expressed a keen interest in the iPad, stating that if the tablet device catches on, it will cause an explosion of internet traffic which will require intense network investment to cope with.
While Seidenberg said he was eager to resolve the dispute with Verizon Wireless JV partner Vodafone over dividend payments, he dismissed the possibility of a merger. “There's no compelling reason for investors to think [a merger] is an exciting thing to do,” he said.
A combined Verizon-Vodafone venture would be a nearly $200 billion business, and as a result it would be tough to convince investors that a merged entity would have greater growth potential than the individual companies, he said.
Vodafone is also not an attractive merger candidate due to its exclusive focus on mobile, he added, which is no longer the preferred business model. “If you want to be just wireless, you, in my opinion, at some point will lose economies of scale.”
Seidenberg also spoke out against some elements of the FCC's new broadband plan, stating that the preliminary proposal seems too heavy on regulation.
“Any time government - whether it's the FCC or any agency - decides it knows what the market wants and makes that a static requirement, you always lose,” he said. “It's a real problem to have well-intentioned people in Washington regulating the business as they understood it to be in 1995. Bad idea. It doesn't work.”
Conversely not enough emphasis has been placed on the escalating problem of internet security, he said. “We look at five billion touches to our network every day to catch breaches. Our company alone spends in the hundreds of millions of dollars protecting our customers' network.”
He said he wasn't sure what role the government should take in this issue, but added that lawmakers should think about the problem more often.
On the company's network investment plans, Seidenberg said the company will invest heavily in fibre in the short term. “The way we see it is we make some big investments up front, which [we] will then ride for 10 or 20 years, because that fibre we put out there will end up increasing its capabilities two, three, four, 15 times.”
Verizon Wireless is taking the same standpoint with its investment in LTE, he added.