Verizon Eyes Labor Contract Soon, More LTE Use, CEO Says
Verizon is making progress on labor negotiations with unions representing 45,000 wireline workers, and expects a proposal before Oct. 1, CEO Lowell McAdam said during a Goldman Sachs investor conference Wednesday. The unions have committed to deliver a proposal before Oct. 1, and recent dialogues were encouraging, he said. Verizon seeks to improve margins in its traditional wireline business through a new labor contract, restructuring its business services and continuing to cut costs, he said. The company wants a labor contact that helps improve efficiency, he said.
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Overall, the tone of negotiations is positive, a Communications Workers of America spokeswoman said. The parties are still working on major issues like keeping quality jobs, health care and job security, she said. Verizon has been negotiating since August, after a two week strike.
There has been a significant pickup in LTE, McAdam said. He expects full Verizon Wireless network coverage by the end of 2013. Verizon should have a “robust” lineup of devices by the holidays, he said. He envisioned many other uses for LTE, including energy consumption management and home security. Meanwhile, Verizon is not concerned about a potential Sprint Nextel iPhone, he said. Verizon is expected to maintain or expand its wireless margins, he said.
Speaking at the same investor conference, Sprint CEO Dan Hesse said the company’s financial targets for the year don’t factor in the rumored iPhone. But if Sprint gets it, it may have to adjust its guidance for that, he said. On the AT&T/T-Mobile deal, McAdam said the deal needed to happen due to spectrum needs. (See separate story in this issue.)
Both Hesse and McAdam expect more growth for prepaid. The economics are right for a prepaid business, McAdam said. If prepaid starts to hurt Verizon’s traditional contract business, the company would scale that back, he said. “Prepaid has become an important part of the industry,” Hesse said. Prepaid pricing is starting to stabilize, but average revenue per use could fluctuate with an increase in adoption of lower-priced services, he said.