Verizon takes wraps off bundling plan

The phone company details plans for growth based on a strategy that will combine long-distance, local, wireless and digital subscriber line businesses.

2 min read
NEW YORK--Verizon Communications is pegging plans for growth on a bundling strategy that will combine the company's long-distance, local, wireless and digital subscriber line businesses, the company said Monday.

"The bundling will give us a great edge," Verizon CEO Ivan Seidenberg told CNET News.com, speaking after his presentation at CIBC World Markets conference.

Seidenberg added that the bundling has already been implemented in the Massachusetts market and that the company will target more markets this summer.

The plan should give the company average revenue per customer of $135 to $150 per month, Seidenberg said in his presentation. The bundles would include 300 national "anytime" minutes and unlimited nights and weekends for the wireless service, he added.

Verizon has seen average revenue per user increase in its DSL, long-distance and local business over the past two years. Average revenue per user (ARPU) is revenue divided by the subscriber total.

In DSL, that measure has gone from 80 cents a month in 2000 to $2 a month in 2002; in long-distance, it has gone from $2 a month to $2.50 a month; and in local service, it has gone from $40 a month from $40.60 a month. Verizon did not give a figure for its wireless business.

Seidenberg said bundling will help Verizon save money and also help it tailor services to customers' needs.

"As a network operator, we have lots of information about your communications habits--be it cell phone, voice mail, long-distance calls," he said.

The CEO also emphasized that Verizon has been the only company to develop the same brand for its wireless and wireline services.

"We've been very aggressive in the last couple years to reorganize this brand," he said.

Verizon said it plans to grow its DSL business by adding more features and attracting more business customers. Currently, 90 percent of DSL sales are to consumers. Competitors such as BellSouth and Sprint have also been trying to attract more business customers.

"In the future, we'll have to focus on DSL enhancements to replace voice revenue," Seidenberg said.

Verizon, like many telecom companies, has seen tough times as the telecommunications industry has been hit hard by a confluence of economic and technological changes.

The CEO added that the company is "smartly managing our capital" in light of Moody's review of its ratings on Verizon and other telecom companies. "We'll be able to manage our debt," he said.