Summary
1. While AT&T’s CEO in his recent interview with the Wall Street Journal almost sounded like he was talking in the third person, the one with Verizon Communications’ Ivan Seidenberg was noticeably more direct in tone. 2. In shifting over to more of a wireless focus and concentrating on enterprise opportunities, Seidenberg has effectively protected his position at the company. 3. There will be no internal strife over these actions.
Analysis
In terms of “Verizon's interest is focused primarily on building its enterprise business” should not be a shock to anyone closely following the company. However, it was quite an admission that it “typically” (implying it can be longer) takes up to seven years to get the return on capital investment for FiOS TV. As we have said all along, fiber to the business subsidizes FiOS. Otherwise, it would have been a big money loser.
As far as Verizon being “among those likely interested in Qwest Communications International long-haul network,” is still debatable in that the federal government may not favor an acquisition just for the purpose of gaining desirable customers.
On Verizon not totally possessing the wireless division, Seidenberg is holding back on his intense yearning in just stating, "I would like to own the whole thing, but we don't have to."
In being “critical of Sprint Nextel’s decision to offer a $50 unlimited plan under its Boost brand,” he is telegraphing to his competitor his feelings that it will have a detrimental impact on the industry. But Verizon’s strengths will prevent it from being too adversely effected. And it will only lead to Sprint’s “self-destruct[ion].”
