Verizon CFO Says Spectrum Revamp Needed; Wireline Repair Could Cost up to $250 Million
There must be a spectrum revamp “somewhere along the line” to free up more frequencies for carriers that are capable of acquiring and deploying them, said Verizon Communications Chief Financial Officer Fran Shammo during a Bank of America conference Wednesday. Meanwhile, it will cost up to $250 million for repairs to Verizon’s wireline operations damaged by recent storms, he said.
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The Justice Department’s recent decision to block the AT&T/T-Mobile deal won’t affect Verizon’s strategy in any way, Shammo said, repeating that Verizon’s neutral on the transaction. But the deal highlights the spectrum shortage problem, he said. The government needs to move faster to auction spectrum, he said. Placing spectrum caps on companies would hurt innovation and consumers, he said, saying the government “has to alleviate the pressure of spectrum and allow the companies who want to acquire it, and build it and innovate, to do that.”
Meanwhile, catastrophic events like Hurricane Irene and Tropical Storm Lee have really had an impact, Shammo said. While wireless operations remained intact, the hurricane hit virtually all of Verizon’s wireline operations, he said. Combined with the strike by its unions, that leaves Verizon two to three weeks from getting the repair and maintenance flows back to normal, he said. The company is continuing to negotiate with the unions. During the strike, Verizon suspended the installation of new FiOS Internet and TV services to focus on managing repairs and maintaining other operations, the company said. “You are going to see less net adds in FiOS” in Q3, Shammo said. The company was up to 100 days behind in FiOS installations, he said.
The operator is focused on expanding its LTE network, Shammo said. As the network expands, Verizon expects LTE devices, especially smartphones, to make up a higher percentage of its device sales, he said. Verizon plans to launch its Unleashed $50 monthly prepaid unlimited plan Thursday, which is being done to coincide with the launch of the carrier’s retail relationship with RadioShack, Shammo said.