Verizon CEO: Video is 'the future' of wireless
Verizon's top executive is aiming to use the company's spectrum deal with the cable industry as a key entry point for what he sees as the next major part of its business: mobile video.
LTE "opens up everything we've been talking about for a long time, and the cornerstone is video … that's going to be the cornerstone of the changes and the future of the business. That's why this relationship with SpectrumCo is important to us," Verizon Communications CEO Lowell McAdam said today at the Guggenheim Securities 2012 TMT Symposium in New York.
McAdam was referring to Verizon Wireless' joint venture with the four cable operators from which it has proposed buying AWS spectrum: Cox Communications, Comcast, Time Warner Cable and Bright House Networks, also referred to as SpectrumCo.
The joint venture between Verizon and its cable partners was formed late last year to develop products that combine wireless and wireline services.
The companies are already moving forward with the joint venture and cross-marketing arrangements formed at the same time the companies signed the $3.9 billion AWS sale, even though the government has not completed its review of the spectrum transaction.
McAdam described an LTE-based service that could "tie every device that has a screen together" and make content seamlessly available across them.
"Customers will flock to a service like that," McAdam said. "That probably dwarfs anything else we would do for top-line revenue growth."
The SpectrumCo deal gives Verizon Wireless a "nationwide opportunity to offload traffic" onto the cable operators' Wi-Fi networks, "and then use that capacity to provide high-demand services like video," McAdam said.
Verizon Wireless is working to convince the FCC and Justice Department to clear the AWS spectrum sale. The transactions have come under scrutiny from lawmakers in both the House and Senate, who have expressed concern about the possible impact on competition. Sen. Herb Kohl (D-Wis.) has questioned whether the deals amount to a "truce" between Verizon's FiOS business and its cable competitors.
The operator recently offered to sell off its 700 MHz A- and B-block licenses if the government cleared the AWS purchase. McAdam said he remained "optimistic" the transaction would clear by late summer.