Ivan Seidenberg, Verizon CEO, saying "voice is dying" is a defining moment in telecom history. He didn't use those words, but his comments at Goldman Sachs are clear "we have to pivot and make a shift from the voice business to the data business and eventually to the video business. ... we must really position ourselves to be an extremely potent video-centric asset."
"The issue there is perhaps it is like the dog chasing the bus a little bit. So what I need to do is get ourselves focused around the following idea, that video is going to be the core product in the fixed line business. ... I shed myself of the burden of chasing the inflection point in access lines and say I don't care about that anymore."
Ivan is spending $18B on FiOS and has been a telco guy for four decades, If he can't see the way to a profitable voice business, who can? As Jeff Pulver has long said, "Voice is just an application." Randall Stephenson of AT&T was ahead of Ivan (and me) figuring this one out. I think he put wireline into "harvest mode" in 2002 when he cut capex literally in half. I don't think he would have bought the wired side of BellSouth if he could have overcome Ed Whitacre's ego. Saul Hansell was one of the few reporters to catch the story. Few in D.C., except Blair, understand these issues.
Verizon remains one of the most profitable companies in the world, but the wireline business is heading downhill so fast JPMorgan writes "Action will likely be necessary to support the dividend beginning in 2012." They won't be able to support $5B/year in dividends without tapping wireless 45% owned by Vodafone. Martin Peers think Verizon will buy a satellite TV company. Knocking out one of the four TV providers is unthinkable if the Obama team is serious about competition, but that's not proven.
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