Uncommon Wisdom

Sep 18 2009   1:05PM GMT

Verizon’s new telco model: Traditional voice doesn’t matter

Tom Nolle Tom Nolle Profile: Tom Nolle

Verizon made official what we’ve been saying for a year or more; wireline voice doesn’t matter. Verizon CEO Ivan Sidenberg told an investor conference that he was no longer worried about wireline voice losses because video and fiber were the future.

He’s right of course. Voice service pricing cannot be protected in a world where more and more users are on broadband. He’s also right that video has a better forward revenue stream by far, and that fiber plant is considerably more valuable than copper plant. Thus, Verizon may be the first of the world’s major carriers to face the future squarely, which will be interesting because we’ll have a close look at how the process goes.

We expect the speech to be an indicator of a major shift by Verizon in 2010, a shift to exploit VoIP and mobile more than it has. It may be, in fact, that the real transition or “convergence” of networks is just starting. We don’t expect this to ring vendor cash registers, however, because it has to be timed to roll out without excessive first cost. We see a revenue-driven shift that would focus on FiOS deployment and would then use FMC and LTE to draw users into a new model.

Related article: Next-gen voice services create carrier opportunities

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