Unlimited is far from the best Verizon can do in terms of innovation in new products and services for consumers, CEO Lowell McAdam said this week.
In comments delivered at an investor conference on Monday, McAdam said “unlimited is not the end state. It is a step along the way.” There remains, he said, “plenty of opportunity for us to innovate between AOL, Yahoo, and the main core of the business until 5G comes online.”
McAdam was cryptic about just what kinds of innovation are coming down the pipe – saying he didn’t want to reveal too much to competitors – but indicated “different products and different structure” are headed to market soon. The first will be launched in the second half of this year, with more scheduled to follow in 2018, he indicated.
According to McAdam, those offerings will return Verizon to the position it likes to be in, which he described as “strong growth and strong profitability,” in the wake of a rough first quarter.
Some pressure in the first quarter came from the introduction of unlimited in February, and that will continue into the second quarter, he acknowledged. But the revenue tide is expected to turn in the second half of the year as customer movement up and down to unlimited evens out.
“The first people that move are ones that did a lot of overage, so you do see compression of their revenue. But then what we’re seeing now is the people that want safety and security of knowing they’re not going to have overages and they’re actually going up in price. So those two are offsetting each other,” he commented.
And despite the presence of multiple unlimited offers in the market, Verizon is still benefiting from its dominant network position, he said.
“In the short term, customers have indicated that the simplicity of unlimited is attractive to them,” McAdam observed. “I’d also point out that the benefit of the best network is still incredibly relevant to customers … As long as we’re within 25 percent of the low cost provider, we’re going to take our fair share of the market.”
