Verizon Communications Inc.'s CFO addressed a couple of big issues about spectrum and contract extensions head on during its first-quarter earnings call on Thursday.
CFO Fran Shammo went after a letter from the U.S. Department of Justice to the FCC that recommends that the latter set out rules that allow the smaller national carriers to get lower-frequency spectrum without being shut out by bigger rivals.
"These rules could cause an auction to fail," warned Shammo on the call.
Verizon shouldn't be penalized by spectrum rules, he said, because the operator isn't one to buy spectrum just to sit on it and keep competitors from using it, otherwise known as spectrum hoarding.
"Verizon has never purchased spectrum to do that. We buy spectrum to use it," Shammo declared.
He said that this year, the operator will launch its first services using Advanced Wireless Spectrum (AWS) it acquired from spectrum deals in 2012. The AWS bandwidth will eventually double Verizon's LTE capacity, although the CFO gave no indication of how long it would take to fully deploy.
Verizon's current LTE deployment, on the 700MHz C-Block, is now reaching 491 markets in the U.S., Verizon revealed Thursday. This means the faster data service is available to 287 million potential customers. Shammo said on the call that 54 percent of the operator's data traffic is now carried over the 4G network.
Analysts on the call, meanwhile, were extremely curious about how a change in the carrier's subsidized contracts will affect its business. The CFO faced questions about whether extending the device-plan contract to a full two years without the option to upgrade a new device at 20 months will get push-back from customers or affect early termination fees (ETFs).
"We're really just positioning that the length of the contract will be two years, not 20 months," said Shammo, adding that Verizon doesn't expect much push-back noting that customers have been very accepting of the introduction of shared data plans.
For its first quarter, Verizon reported revenues up 4.2 percent from last year, at US$29.4 billion. Analysts had expected revenues of $29.55 billion.
Earnings per share beat expectations, at $0.68 per share, compared to $0.59 in the same quarter last year. Analysts surveyed by Thomson Reuters had expected EPS of $0.66.
— Dan Jones, Site Editor, Light Reading Mobile