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Verizon Exec: No ROI on 3G Investment

Tue, 02/28/2012 - 6:43am
Maisie Ramsay

Verizon Wireless doesn't expect to recoup future investments in its 3G network and is pushing to move customers over to its more efficient LTE service, a top company executive said at an investor conference yesterday.

After building up its CDMA EV-DO network to withstand the impact of the data-intensive iPhone, "we really do want to keep that investment to a very, very minimum. Because based on my projections for every dollar I invest in that now, I will never get that dollar in return," Verizon Communications CFO Fran Shammo said Monday at the Deutsche Bank Media and Telecommunications Conference.

Currently only about 5 percent of Verizon Wireless customers are on its LTE network, Shammo said. Verizon Wireless has about 87 million postpaid customers at the end of 2011, putting its LTE customers at an estimated 4.35 million.

The operator began a limited time promotion last month that offered customers double the amount of LTE data under its current plans. The promotion, which does not apply to its 3G services, is part of an effort to migrate customers to LTE.

"It is very critical for us," Shammo said. "I don't want to spend any more money on my 3G network."

Verizon launched its LTE network in late 2010 and has pursued an aggressive buildout schedule. The LTE service is available in about 195 markets and is offered on more than 20 devices.

Shammo also touched on family data plans, which Verizon Communications CEO Lowell McAdam has alluded to in the past. The shared plans "will be more of a 4G play" and will be launched around the middle of this year, he said.

Verizon Wireless has long offered bucket plans for voice services, but has yet to launch similar plans for data. Moving forward, it will focus on bundled service plans to address erosion of SMS revenue from third-party messaging applications, Shammo said.

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