Verizon bets on video, VoLTE and tablets for growth
Net smartphone additions are important, but they're not everything. That was Verizon CFO Fran Shammo's take on a wireless industry that he says remains healthy and poised for growth.
In a talk at the annual Oppenheimer Investor Conference that was broadcast online, Shammo said Verizon is looking to new technologies like LTE Multicast and Voice over LTE as potential growth areas. He also said tablets pose an opportunity.
Verizon report that it had added 304,000 postpaid phone net additions and 1.15 million postpaid tablets. At the end of the quarter, smartphones accounted for nearly 75 percent of retail postpaid customer phone base, up from 72 percent in first-quarter 2014. This was also the third straight quarter of company-record net additions for tablets.
"If you look at the penetration of tablets, it is extremely small...there's a huge runway for tablets," Shammo said.
Shammo reiterated the opportunity Verizon sees in video, a favorite theme of CEO Lowell McAdam.
"Multicast is a few years out...that's the pivotal start to change the way content is delivered on the mobile handset," Shammo said, noting that driving an ecosystem of devices that support the technology will be key to its adoption.
On the company's network congestion problems in major cities, Shammo said that Verizon was close to completing the deployment of AWS spectrum in major cities, which is expected to alleviate the problem.
"We engineer for a consistent 8-12 Mbps," Shammo said. "We think that the quality of the network is going to be even more important in the data environment than it was in the voice environment."
Even as players like T-Mobile and Sprint insist that they will compete on price, Verizon maintains that it can maintain its premium status.
"Price is one thing but at the end of the day, the last 13 years’ surveys have shown network quality is the main thing for consumers," Shammo said.