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Verizon CFO Talks About iPhone And Possibility Of LTE-Only Phones In 2014

Verizon CFO Talks About iPhone And Possibility Of LTE-Only Phones In 2014

March 5, 2013
Earlier today, Verizon CFO Fran Shammo spoke at Deutsche Bank’s Media, Internet and Telecom conference. Shammo was asked a number of questions covering a variety of topics, not least of which is the impact of Apple's iPhone on the performance of the largest carrier in the U.S. A couple of months ago, Verizon reported that it had 9.8 million smartphone activations during the fourth quarter of 2012. As noted by 9to5Mac, a record 6.2 million of these were iPhone activations and about 3.1 million were activations of the 4G/LTE-enabled iPhone 5, specifically. Now, while acknowledging the fourth quarter is always the highest quarter of the year because of the holiday season, Shammo has revealed that the iPhone 4 played a rather big role during the holiday quarter of last year:
… for the first time ever, because of the iPhone 5 launch, we had the 4 at free. So it was the first time ever you could get a free iPhone on the Verizon Wireless network. So that produced a lot of volume for us. We had a lot of new customers come into Verizon who took that free phone, and that was great for us because again if you think about — we sold a lot of LTE product in the fourth quarter. We sold a lot of 3G product from the iPhone products in the fourth quarter.
And speaking of LTE, Shammo said that Verizon will ultimately transition to voice over LTE by end of this year or beginning of next year. This will eventually pave the way for LTE-only phones in 2014, which, in turn, will cause subsidies to decrease:
… if you look out into late 2014 then you start to think of things like, okay, so now I can start to take the CDMA chip out of the phone and just have a pure LTE handset. That also starts to reduce subsidies. So over the next two to three years I think we will start to see subsidies come down.
Be that as it may, Shammo noted the importance of maintaining the efficiency of its "very large 3G network" as Verizon makes its move toward the 4G network.

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