Subject: [NEXTEL-1] Verizon's Gutsy Bet

From: [email-masked]
Date: Wed, 30 Jul 2003 16:15:47 -0400

-------- Original Message --------
From: [email-masked]
Subject: Verizon's Gutsy Bet

http://www.businessweek.com/magazine/content/03_31/b3844001_mz001.htm

AUGUST 4, 2003 

Verizon's Gutsy Bet  
Will its massive rollout of fiber-optic cable -- right to customers' homes and 
offices -- keep it ahead of the pack? 

Ivan G. Seidenberg hardly looks like Old Man Telecom. The chief executive of 
Verizon Communications (VZ ) Inc. is only 56 and has the build and intensity of 
someone much younger. But sitting in his sun-filled, 39th-floor office in 
Midtown Manhattan, Seidenberg points out that he joined the company as a cable 
splicer's assistant in the Bronx when he was 19. He even keeps his cable 
splicer's shears, knife, and sheaf tucked away in his desk. "It's hard to 
believe, but I've been here for 37 years, more than one-third of this company's 
history," he says. "I feel an obligation to make sure this company is well 
positioned for the next 100 years."

Now Seidenberg is launching a series of sweeping initiatives to make good on 
his vow. From hardball pricing tactics that have knocked rivals back on their 
heels to a capital-spending war chest that's the largest in telecom, he's 
determined to transform what was once just another sleepy phone company into 
the pacesetter for the industry. "When you're the market leader," says 
Seidenberg, "part of your responsibility is to reinvent the market."

At the heart of this reinvention is the most ambitious deployment of new 
telecom technology in years. Verizon plans to roll out fiber-optic connections 
to every home and business in its 29-state territory over the next 10 to 15 
years, a project that might reasonably be compared with the construction of the 
Roman aqueducts. It will cost $20 billion to $40 billion, depending on how fast 
equipment prices fall, and allow the lightning-fast transmission of everything 
from regular old phone service to high-definition TV. No competitor yet dares 
follow suit, fearing it could be their financial Waterloo. "We'll watch them 
closely and go to school on them if they have found something economic," says 
Ross Ireland, chief technology officer at SBC Communications (SBC ) Inc., the 
second-largest phone company after Verizon.

Seidenberg is being no less aggressive when it comes to the wireless technology 
that has consumers and companies equally abuzz -- Wi-Fi. In an unprecedented 
move, Verizon is blanketing Manhattan with more than 1,000 Wi-Fi hotspots that 
will let any broadband subscriber near a Verizon telephone booth use a laptop 
to wirelessly tap the Net for the latest news, sports scores, or weather 
report. If the rollout goes well, Verizon will duplicate this wireless grid in 
other major cities. Next up: third-generation wireless service, known as 3G, 
which lets customers make speedy Net connections from their mobile phones. 
Verizon will begin to deploy 3G in September, at least three months before any 
of its major competitors. "The other guys will say they want to be the best 
follower. The guy on the frontier takes a lot of arrows, so they say, 'Let 
someone else roll out 3G and fiber-to-the-home.' Well, that someone else is 
Verizon," says Alex Peters, lead manager of the $200 million Franklin Global 
Communications Fund, which bought an undisclosed number of the company's shares 
last year.

Verizon is leading the way with its pricing strategies, too. In March, the 
company became the first Bell to slice its broadband Internet service by 30%, 
to $35 a month. That's typically 10% to 20% cheaper than cable players such as 
AOL Time Warner (AOL ) Inc. and Comcast (CMCSK ) Corp., which have grabbed an 
early lead in broadband service. Even the musty long-distance business is 
getting a jolt of innovation: Earlier this year, Verizon became the first Bell 
to offer unlimited long-distance and local calls for one flat rate, typically 
$55 a month. Customers loved the idea, and Verizon quickly zoomed past Sprint 
(FON ) Corp. to become the third-largest consumer long-distance player in the 
country. Now, every other Bell has introduced its own flat-rate service.

(Full story at link)

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