Small Cells Are Big Topic

Verizon Communications’ EVP and CFO, Fran Shammo, spoke at the JPMorgan Global Technology, Media, and Telecom Conference yesterday. Verizon, like Crown Castle, has been very vocal about their focus on small cells. Phil Cusick of JPMorgan asked Shammo about building and managing their own small cell network, and if the company would want to own fiber or just use someone else’s. “We lease a lot of fiber today. There is a lot of competition actually in the fiber world. So, we actually don’t own a lot of fiber that we have, we lease it, we own the electronics on both ends of it but these are long-term leases and we’ve done this for years, so this is nothing new to us,” Shammo explained. “We don’t need to own all of the small cells, we just entered into an agreement up in Boston for 400 site [densified] antenna system, that someone else build out, got all the zoning, has all the fiber and so we’re leasing that from them. So there is a lot of alternatives out there today to create capacity and it doesn’t mean that I have to own and build and control everything, I can do that through third parties, I mean it similar to towers, I don’t own towers but I still run my network off those towers and as long as I get the protections in the agreements that I need for the longevity then it’s a perfect solution for us.” Network capacity was also a big question after Verizon’s acquisition of AOL, which many believe will support the over-the-top video service Verizon plans to release later this year. “But from a capacity standpoint, that’s why I’ve been saying consistently you will not see the Verizon Wireless capital program decrease anytime soon and we believe because of the consumption model and we believe of the growth of data in the network which is what we want for monetization reasons, we’re going to need to continue to increase our CapEx around the wireless asset. Now overall Verizon again wireline will come down, wireless will go up, overall company will stay about flat, but I don’t see us decreasing capital anytime soon because of the way we believe that video will be consumed,” Shammo said.