Verizon Trimming Some Wireline Limbs

I've been teaching Verizon technicians in a program called NextStep since the mid 1990's. The Next Step Program allows contract qualified Verizon associates who are members of the Communications Workers of America (CWA) or the International Brotherhood of Electrical Workers (IBEW) to earn an Associate in Applied Science degree in Telecommunications Technology from a participating college. It's been a great opportunity for everyone involved to keep up and learn as the industry has transitioned.

This morning I taught my first class of the fall semester and we had some interesting discussion on where copper based landline services like DSL are going. The other night on Jim Cramer's show, Verizon CEO Lowell McAdam opened up a bit on the companies plans. Here's some back and forth from the show posted at  Stop the Cap!:

Jm Cramer, CNBC: “[Under former Verizon CEO Ivan Seidenberg, Verizon] took areas that really weren’t growth areas and sold them to Frontier and other players. Would you be able to get rid of some of your underperforming landline businesses to be able to increase [Verizon's] growth even further?”

Lowell McAdam, Verizon: “That is a possibility. [...] If you talk about opportunities here, now that we have One Verizon, [...] we are going to trim some limbs around the tree here. Things that aren’t performing will not be a part of our portfolio so we can invest in things that will drive the kind of growth we are excited to be able to tap here.”

In New Jersey and New York, Verizon is moving on a wireless landline replacement called Voice Link. It's optional for some customers but many are thinking it will replace copper services in there is approval from the states regulators. Verizon is calling Voice Link an improvement for voice customers dealing with repeated service calls.

Bloomberg estimates the Verizon wireless net worth is around $289 billion while Verizon wireline (landlines, FiOS and business broadband) is worth just $24 billion. Looking at revenue, Bloomberg says Verizon wireline totaled $39.8 billion last year which is down from $50.3 billion in 2007. During the same period, Verizon wireless revenue was up 73% to $75.9 billion.

It's pretty clear where this is all going - at least when it comes to Verizon wireline.

You can read a transcript of the complete McAdam interview linked here.