Verizon touts core service, fiber optics
LITTLE ROCK, Ark. (AP) – Adding customers who simply want to talk on the phone is pretty low on Verizon Communications Inc.'s list of ways it plans to grow, and the company's CEO told shareholders Thursday that the business will be stronger for it.
Verizon is nearing completion of its sale of traditional telephone business in 14 states and is focusing its growth on delivering data and video, including high-definition movies, through speedy wireless and fiber-optic connections.
Verizon Chairman and CEO Ivan Seidenberg said the company has about 93 million customers, plus 7 million wireless connections that are embedded in electronic devices, automobiles and buildings.
Those connections have made the company part of the "fabric of business, industry and society," Seidenberg said.
"Our new 4G wireless network will put us at the forefront of this revolution, and we're working with partners from all over the world to develop the new products and devices that will ride on our network and open new pathways for growth," he said.
Verizon is building its "fiber-to-the-home" business, which already enables customers to use the Internet through their televisions. Coming soon will be 3-D television.
"And ultimately, we think the fiber-connected home will be a hub for managing home security, energy use, medical monitoring, teleworking and more," Seidenberg said.
For large business customers, Seidenberg said growth will come from having on-demand applications available on the Internet – cloud computing – so software will be on the Web rather than loaded in individual computers.
"The Internet is also changing the business model for big segments of the economy, so we are increasingly focused on managed services in areas like health care, smart utility grids, financial services and security," he said.
Members of the Communications Workers of America union protested outside the meeting hall in downtown Little Rock, criticizing Verizon's planned sale of its wirelines to Frontier.
Verizon worker and CWA member Rodney Story of Richmond, Va., said the company wants its wireline workers to all go to Frontier if approval is granted for the sale, which has regulatory approval pending with the Federal Communications Commission and West Virginia.
"They don't want us in the wireless side at all," Story said. "They are anti-union."
Story and other workers said they are upset at job losses, with a buyout being offered to some workers.
Ken Williams, a union member from Charleston, W.Va., said some workers are taking retirement earlier than they planned because they don't want to give up benefits that they believe they'd sacrifice by becoming Frontier employees.
Verizon spokesman Bob Varettoni said layoffs are rare at the company, which has 217,000 employees. He said an "enhanced separation policy" gives workers a bonus to leave. Union members said they've been offered severance pay of $2,200 per year of service.
Union members who attended the meeting asked Seidenberg if there were any further plans to sell parts of Verizon.
"We have no plans to sell any more wireline," Seidenberg said, but added plans could change.
Seidenberg said Verizon isn't geared to serve areas with a low density of traditional phone lines or sparse wireless coverage.
"We are an urban wireless company," he said.
Verizon met in Little Rock, the former headquarters of Alltel Corp., which Verizon acquired in a $28.1 billion deal in 2008. Many high-paid Alltel headquarters workers were let go, but Verizon opened a regional headquarters at the former Alltel campus and opened a call center. Verizon says it has 2,400 workers in Arkansas at present and will add another 100 in 2011. Alltel had about 3,000 Arkansas workers.