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Verizon Focusing on Capacity Issues in NYC, SF, Chicago

Wed, 11/13/2013 - 10:13am
Andrew Berg

As the first to complete its LTE coverage, Verizon is understandably the first to see capacity issues. According to CFO Fran Shammo, it will also be the first address those issues.  Verizon LTE Coverage

"I'm done with coverage build, so now, all my efforts are around capacity," Shammo said during a talk Tuesday at the Wells Fargo 2013 Tech, Media & Telecom Conference, which was broadcast online. 

Shammo admitted that data usage, particularly video consumption over LTE, had far exceed Verizon's expectations, with one third of subscribers using upwards of 64 percent of all data over Verizon's network. In major markets like Chicago, San Francisco and New York, he said that percentage was "far north" of 64 percent. Still, he said, Verizon remains the market leader and can now focus all of its CapEX on addressing capacity. 

"All of our CapEX are going to be concentrated around densification and then you'll start VoLTE and Multicast and some of these LTE- Advanced technologies that will come in the next year. And we'll be in a great position to dedicate resources for that," Shammo said. 

Shammo noted that in those markets that are seeing capacity pressure, Verizon will be using LTE-A technologies, as well as deploying more DAS systems and lighting up more AWS spectrum to address the problem.  

Shammo cautioned that subscribers on competing carriers that are still seeing LTE speeds above 20 Mbps will have to come back to reality. "There's nobody on that network," Shammo said. "When you fully load LTE, it's rated for 8 to 12 Mbps."  

Verizon sees its current spectrum position as stable, at least for the next three to four years, but Shammo stressed that the carrier will definitely need more airwaves in the future. He said that the chunk of lower 700 MHz A Block, which the company had tried to sell but later returned to its portfolio, has increased in value since the carriers reached agreement earlier this year on interoperability for those frequencies. 

"With the technologies that are changing, different frequencies don't bother us," Shammo said. 

Shammo also commented on Verizon's recent buyout of Vodafone from the Verizon Wireless joint venture. He said all the necessary documents have been filed and that the transaction is still on track to close some time in the first quarter of 2014. 

When asked about how he viewed the strengthening positions of Sprint and T-Mobile, Shammo said it's good for the entire industry. "Competition is good, and as I've said before, we needed for some of our competitors to get stronger, because the worst thing that could happen is we're viewed as a duopoly."

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