Verizon CEO Says He Has “Moved On” From Eyeing A Cable Deal
Verizon isn’t interested in buying a cable operator, having determined that their fiber-optic line infrastructure “isn’t there,” CEO Lowell McAdam told an investor gathering this morning.
“We’ve moved on,” he said at the Goldman Sachs Annual Communacopia Conference. “For the future that we see, you’re going to have to have deep fiber into the network…I’d rather just put in the fiber.”
That may quash the speculation that Verizon would try to pick up Charter Communications, or another major wired carrier. Their lines were seen as potentially useful to speed the telco’s roll out of 5G wireless services.
Many Verizon watchers also believed that a cable company would help it to compete with AT&T — which owns DirecTV and is preparing to complete its $85 billion acquisition of Time Warner.
But McAdam says Verizon can compete with all comers by offering the fastest wireless network, especially as it introduces 5G — which he says will “usher in the fourth industrial revolution.”
The technology “is on our doorstep, and it’s going to be huge.” He says it will be substantially faster than current wireless technology, allowing for 10 times longer battery life and 1,000 times more capacity.
When it comes to video, “the numbers all show over-the-top is gaining ground and the 300 channel (pay TV) bundle is under assault,” he says.
“We’re building the network that doesn’t care,” the CEO says. “I don’t care whether the customer goes over the top or buys a linear package. We’ll sell either one to them….We want to have the network that people can provide whatever service they want on it.”
Verizon’s “approach to offering video on your mobile device” will focus on Oath, the new unit created when the telco added Yahoo’s assets to the ones it owned from AOL.
“The data analytics between the network and Oath, for us, is something that we think has tremendous value — and the advertisers that come to visit think there’s a lot of value there,” he says.
He notes that, despite its size, Verizon can’t “slay Google” in the hunt for digital ads. “But that market is growing pretty well. We don’t have to grab many percentages of that to hit the $10 billion” company target.
“The advertisers are looking for an alternative and our approach to delivering video and having that available on your mobile device — a lot of those deals will be focused on Oath than on wireless,” he says.