Verizon CFO Says No to Buying Dish, Unlimited Data Plans
Verizon isn't interested in pursuing Dish Network to get ahold of its spectrum or for any other reason, said Chief Financial Officer Fran Shammo at a Goldman Sachs investor conference Thursday. Shammo, who's soon departing (see 1609010085), also said Verizon won’t offer unlimited data plans. Shammo offered his take on Dish without being asked directly. Goldman analyst Brett Feldman asked him about Verizon plans for acquiring additional spectrum. Feldman said he appreciated Shammo couldn’t talk about the incentive auction. “Don’t ask me about Dish, either,” Shammo shot back. “The answer is no.”
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Sprint and T-Mobile have been hyping their unlimited offerings. Verizon believes “at the end of the day, the majority of people don’t need unlimited plans,” Shammo said. “The people who use unlimited plans can be abusive. They can really wreak havoc to your network.” Shammo said: “You cannot make money on an unlimited video world.”
Verizon customers who hit their data caps can enter “safe” mode, Shammo said. “You can determine if you want to just stay at safe mode, which allows you to do text messaging, voice. It gives you some capability to do email. Certain videos you can watch, but probably not much video, because video is really the high driver of usage.” The company also lets customers who buy extra data carry over unused capacity into the next billing cycle, he said.
The carrier doesn’t plan to cut capital expenditures on its wireless network, Shammo said. The company continues to plow $10 billion to $11 billion per year into the network as it makes it more dense, he said. “I’m going to speed into the 5G world in 2017, and it’ll be similar to LTE as far as I’m concerned, where we get a leap on all of our competitors,” he said. “So we’re moving forward” while “two of our competitors are still trying to deal with building out their LTE network. I mean, that’s like five years ago already.”
Verizon is launching service in the 28 GHz spectrum it's leasing from XO, as part of its buy of that company, Shammo said. Verizon has approval to launch fixed wireless in the band, he said. “It’s only eligible for fixed. We’re hoping down the road it will become mobile at some point, but we’re really concentrating on the fixed piece.”
T-Mobile’s focus next year will be on rolling out its 700 MHz spectrum and working on the 600 MHz licenses the carrier buys in the TV incentive auction, CFO Braxton Carter said at the conference. “Continued geographical expansion and fortification of our network will be a top priority because that’s the foundation of everything.”
The carrier also has more “uncarrier” proposals in the works, Carter said. As CEO John Legere says, “we won’t stop,” Carter said. “We have multiple moves planned for the future.” T-Mobile also will be focused on shoring ups its books, he said. “Ultimately, we’re here to grow value for our shareholders.”
“When the industry looks at what we do and copies our moves, we think that helps our brand,” said Mike Sievert, T-Mobile chief operating officer. “It helps demonstrate that we’re the ones out changing the industry, making it better for customers.”
Sievert said the era of data buckets is effectively over. “We haven’t had limited internet on our wireline service [in the U.S.] since the 1990s,” he said. “As we know, all content and information is moving to the internet … and the internet itself is moving to mobile.” The big question is how long any wireless carriers will impose limits on data, “how long our competitors will stay on the wrong side of this long-term trend,” he said.
Verizon’s answer on unlimited plans continues to be “somewhere between no and hell no,” Sievert said. “I think that’s fantastic” because it helps the T-Mobile brand, he said. "Content ought to be consumed on mobile phones," he said. T-Mobile customers consume three times more music, twice as much video and 50 percent more data overall than those at the other major carriers, he said. "That's one of the things that's driving our customer satisfaction to higher levels."
T-Mobile plans to move aggressively to build out licenses it gets in the incentive auction and elsewhere, said Neville Ray, chief technology officer. “I think there’s a lot of talk about spectrum not getting built or available for operators to use until the next decade. We’ve very determined to prove that wrong.”