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More Bundles In Store at Verizon, CFO Says

Thu, 05/24/2012 - 7:11am
Maisie Ramsay

Verizon Wireless customers may see more bundled services in the future, a company executive said at an investor conference on Wednesday.

"As progression happens here around SMS and so forth, what you're probably going to see is more bundling of services in the future," Verizon Communications CFO Fran Shammo said at the Barclays Global Technology, Media & Telecommunications Conference.  

Shammo did not elaborate on his comment, made after he was asked about the tradeoffs of shared data plans set for release this summer. The company's shared voice plans result in lower ARPU but improved churn, and the same principle may apply for bucket data plans, the investment conference moderator suggested. 

Bundling services can allow operators to lock customers into higher-priced plans that may provide them with more services than they actually use, increasing sales. For instance, AT&T last August stopped offering its lower-tier text messaging plans in favor of more expensive unlimited SMS plans or a pay-per-text rate. 

Verizon Wireless so far hasn't followed suit and still offers both pay-as-you-go, mid-range and unlimited texting plans. However, Verizon's wireline division recently stopped offering standalone DSL service. New and upgrading customers now must also pay for landline phone service when they sign up for the company's DSL Internet service.

In terms of bundling Verizon's wireless services with its FiOS offering in a quad-play bundle, Shammo said the offerings have so far had limited success because customers expect discounts for signing up for the bundles, discounts Verizon isn't prepared to offer.  

"We really don't want to give a discount. It comes down to getting one bill instead of two bills," he said. "I think that's why the quad play hasn't been adopted... you haven't seen those big discounts for putting all those services together."  

Verizon may pursue other wireless pricing options outside of bundles. Shammo said Verizon's LTE network "gives you the ability to price data many, many different ways."  

Speaking hypothetically, he said that the service could allow content providers to pick up some of the tab for sending bandwidth-intensive content like video to subscribers, instead of having the data's cost burden placed entirely on users. 

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