Verizon Communications CEO Ivan Seidenberg told an investment conference today that the company’s LTE services could be a “modest substitute” for in-home cable broadband.
Speaking at the UBS Global Media and Communications Conference, Seidenberg said the company’s new mobile broadband services wouldn’t fully replace in-home cable and FiOS services, but that some customers would choose LTE over wireline-based broadband services.
“I think on the margin there will be some substitution,” Seidenberg said, adding that “in time, 4G will be a modest substitute” for cable Internet services.
Verizon turned on its LTE service in 38 markets on Sunday and plans to expand into additional markets over the next two years with the goal of covering its 3G footprint with next-generation mobile broadband services. The company currently offers two LTE-capable USB modems and Seidenberg said there would be a “proliferation of a large number of devices” starting in the middle of 2011.
Seidenberg also shed some light on Verizon Wireless’ relationship with Vodafone, which owns a 45 percent stake in the operator. He said that Verizon Wireless was choosing to pay off its debts over the next year instead of paying a cash dividend to Vodafone and that the “next meaningful discussions about the distribution of cash will be at the end of 2011.”
The lack of a cash dividend from Verizon Wireless has been a sore spot with Vodafone, which is seeking returns from its subsidiary companies. Seidenberg hinted that Verizon may begin payments to Vodafone as early as 2012, saying “it’s fair to see at current course and speed we should have a discussion about what happens in 2012, 2013.”
Seidenberg said he will likely retire in the second half of next year. Verizon Communications COO Lowell McAdam, the former head of Verizon Wireless, has been tapped to succeed Seidenberg upon his retirement.
Seidenberg has worked to get a succession team in place ahead of his departure. Today, Verizon Wireless Chief Technical Officer Tony Melone was promoted to executive vice president and chief technical officer of Verizon Communications after Shaygan Kheradpir retired from the post to take a position at Barclays.
Melone got his current position at Verizon Wireless in 2007 and was instrumental in the company’s launch of LTE services. In his new post, Melone will be responsible for Verizon’s technology roadmap, including overall platforms integrity and architecture, and product innovation.