Verizon, Like Sprint, Sees M2M as ‘Revenue Opportunity’

Nation’s No. 1 Wireless Carrier Reports Lower 3Q Profit

On the wireline front, FiOS adoption slowed, although it wasn’t anything to sniff at. Wall Street expected 253,000 net new adds; Verizon’s actual numbers came to 191,000, or about 33 percent less than the second quarter of 2009. The news was “a clear disappointment,” Sanford Bernstein analyst Craig Moffett told The Associated Press.

But John Killian, executive vice president and CFO of Verizon, said executives are “pleased with FiOS development.

"We continue to look at all kinds of revenue opportunities in that business. We think FiOS will continue to expand opportunities to enhance revenue," he told analysts.

Meanwhile, Verizon’s enterprise business was up a mere 2.5 percent due to the global recession; yet officials said they are happy with its performance, too, in the United States and in other countries.

“We are seeing CIOs start to be a little bit more willing to spend on new capital, new initiatives,” Killian said. “We still see a slight drag from employment [but] we think once employment really comes back in a bigger way we will do extremely well in the enterprise space and we are very well-positioned."

Wholesale was a similar story. Growth remained flat at $2.4 billion, the same amount as during the second quarter of 2009. So, as it waits for the economy to improve, Verizon its watching its wholesale capex, Killian said. He added that executives think “we have got all of the right initiatives to drive that margin improvement over time.”

Access Lines: Bye Bye, Jobs

And what about the access-line sector, once the bright star in any service providers’ portfolio? For Verizon, it’s less and less a profit center – hence, the reason why it’s laying off more longtime workers; the reason why it sold its New England lines to FairPoint – a move that led to FairPoint’s Oct. 26 bankruptcy declaration; and why it’s trying to offload other lines to Frontier Communications in 14 states.

Speaking of that selloff, Verizon is focused on wrapping the controversial transaction as soon as possible. It’s catching flack as lawmakers, the Communications Workers of America and other entities fear Frontier will cut jobs and hurt consumers. For Verizon, though, the concern is making sure regulatory proceedings continue so it can seal the deal.

“There are three or four jurisdictions that are getting closest to decisions," Seidenberg said. "Frontier has done a very good job at differentiating why this transaction is different than any of the previous transactions," he said, referring to the FairPoint debacle.

"We are still confident that this will get closed on time."

Because of the wireline slowdown, Verizon already has eliminated 4,000 related jobs and reduced sales, general and administrative expenses. It's also sloughed off some real estate holdings and call centers, and clamped down on procurement spending.

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