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Verizon CFO Fran Shammo highlights the importance of coming 4G multicast video for the operator as it looks to expand wireless revenue streams.

Verizon's Coming Attractions: 4G Video

Dan Jones
3/10/2014
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4G LTE video will help to drive Verizon's wireless business in the coming years, the firm's CFO said Monday morning.

Talking at the Deutsche Bank Media, Internet & Telecom Conference in Florida, Fran Shammo, EVP & CFO, made it clear that Verizon Communications Inc. (NYSE: VZ) is expecting video to help drive growth as the smartphone growth boom starts to taper off.

He expects this to start as Verizon's Voice-over-LTE (VoLTE) service begins this year. "There's a lot more video that comes with the LTE feature of voice," he said. (See VoLTE: So Close You Can Hear It and Verizon VoLTE Testing Spotted.)

Shammo points to video calling -- across different handsets and LTE networks -- as one key feature. Then Verizon can layer in capabilities like video voicemail and video address books.

"Whether we'll charge for that or not is a whole different story," Shammo said.

As Shammo sees it, though, this is just the beginning of Verizon's wireless video ambitions. He was clearly big on the possibilities for multicast as Verizon launches the broadcast video network. (See Verizon's 4G Video Freeze Frame.)

"That'll take about a year or two before the chipsets and the handsets get proliferated throughout the marketplace, Shammo said.

Shammo attempted explained the importance of multicast to a room full of financial folk like this:

"If everybody in this room was to watch the same video today we would probably bring down the cell site because there wouldn't be enough channels in that cell site to deliver the same video to everybody," he told the crowd. "With multicast, it's one channel and one cell site and you can all watch the same video on the same channel."

This could make the user's device a near-continuous 24-hour video channel, Shammo said. This means that the operator could potentially sell hour specials, "pay-per-view events," or even a "World Cup series," he says.

"There's a lot of ability with multicast to really generate additional revenue for the industry," Shammo said.

The CFO isn't expecting smartphone growth to die off just yet, however, noting that Verizon has around 50 million customers that could upgrade to LTE over time. He says Verizon has 25 million customers on "basic phones" and 26 million on 3G.

"If you take this out the next two to three years, I agree with you, the smartphone category will start to slow but some of these other categories will start to take over," Shammo said.

— Dan Jones, Mobile Editor, Light Reading

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SachinEE
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SachinEE,
User Rank: Light Sabre
3/23/2014 | 4:19:18 AM
Re : Verizon's Coming Attractions: 4G Video
Will the video broadcast not yet another smart phone feature? I can't understand how it can be differentiated from smart phones. Smart phones growth doesn't seem to be tapering off for now at least. Ever growing figures of smart phone manufacturers actually speak to the contrary even without any further features like video broadcast.
DanJones
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DanJones,
User Rank: Blogger
3/20/2014 | 3:00:43 PM
Re: Re : Verizon's Coming Attractions: 4G Video
Yeah, I suspect they haven't exactly nailed down pricing yet myself.
SachinEE
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SachinEE,
User Rank: Light Sabre
3/20/2014 | 2:58:20 PM
Re : Verizon's Coming Attractions: 4G Video
One has to say that Shammo adopted a simple way to explain multicast to finance people who might have found it difficult to grasp otherwise. It is interesting to not though his comments about the pricing of this service. It is a different story altogether but a relevant one. Many people would be watching carefully how they plan the pricing.
KBode
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KBode,
User Rank: Light Sabre
3/10/2014 | 3:18:59 PM
Re: Pricing
Yeah, I remain much more interested in VoLTE than video on my phone (as somebody who cut ye olde copper POTS and VOIP years ago).
DanJones
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DanJones,
User Rank: Blogger
3/10/2014 | 3:17:01 PM
Re: Pricing
Yeah, I suspect sponsored data will be the model.

 

Interesting too that he didn't talk about VoLTE feature pricing. They breezed past that during the conversation, not too interesting to financial analysts I guess.
KBode
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KBode,
User Rank: Light Sabre
3/10/2014 | 3:10:35 PM
Pricing
Should be interesting to see what this is capable, especially in regards to wireless video for live events.

I'm curious how they plan to examine pricing for this service in a way that doesn't upset the net neutrality brigades? I imagine somewhere in his head is something along the lines of AT&T's Sponsored Data effort.
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