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