Smooth sailing in rough seas: McAdam keeps VZW on course

For Verizon Wireless and its recently installed chief, Lowell McAdam, life seems great. Customer growth remains near the top, customer churn remains nearly invisible and the carrier recently unveiled new devices targeting fast-growing demographics as well as a certain “fruity” competitor.
Of course, not all is sunshine and lollipops for McAdam and the Verizon Wireless crew. Regulatory pressure is mounting against wireless carriers about how they handle customer information, high-tech giants are throwing their weight behind legislation that targets carriers’ business practices, and an upcoming spectrum auction has thrown just about everyone in the industry for a loop. (Did I also mention a certain handset vendor entered the market?)
In an interview with RCR Wireless News yesterday, McAdam gave his perspective on a number of hot-button issues industry is facing.
Legislative pressure
for a consumer bill of rights
Wireless carriers believed that Congress understood that the wireless industry is successful because it is competitive. “You don’t get to 247 million subscribers by doing dumb things.”
However, McAdam said, the industry needs to do a better job telling legislators that heavy-handed regulation isn’t good for consumers because it will only increase costs and stifle innovation. State-by-state regulation would push the industry back to its early years, McAdam contends. At that time, a regulator in California had to approve each handset before it was allowed to be offered for sale in the state.
“There’s clearly a well-funded group looking for every opportunity to turn current legislation against carriers,” McAdam said.
700 MHz auction
McAdam noted that Verizon Wireless is very interested in the upcoming 700 MHz spectrum auction, though the company is not desperate for new spectrum to support its strong growth. However, McAdam said the Federal Communications Commission’s rules for 700 MHz have diminished the value of the spectrum.
McAdam said rules for open access could hobble bidding on some of the spectrum. In addition, vague rules for chunks of airwaves set aside for public safety likely will give bidders pause.
“I question if we’ll get to the reserve price,” McAdam said, referring to the minimum $4.6 billion the government must get to auction the spectrum.
Technology
choices
McAdam also quelled recent concerns regarding the carrier’s technology future. Verizon Wireless’ parent companies said the carrier was planning to move to Long-Term Evolution, an advanced version of W-CDMA, for its next-generation technology-an announcement that seemed counter to the carrier’s tradtional CDMA stance.
“Clearly there are advantages of moving toward the same technology as Vodafone at some point,” McAdam said. But he said the carrier has not made any decision yet and any such move would require plenty of testing, which will take years.
The iPhone
And as for that certain phone that starts with a vowel?
“I think the iPhone is great for the industry,” McAdam said. “It was not a model that worked for us and we are glad we turned it down, but the innovations that the iPhone brought to the market are great for consumers.”
McAdam added that Verizon Wireless is confident its recently announced devices, including the LG Electronics Co. Ltd. Voyager that he sported during the interview, was a great response to the iPhone. Further those devices fit the Verizon Wireless operating model.