Verizon sees growth from OTT Video and IoT: Morgan Stanley Conference

Speaking at a Morgan Stanley conference March 2nd, Verizon CFO Fran Shammo outlined that future path and gave a few hints about the OTT service, which will be launching this summer, according to a transcript from Seeking Alpha. 

Shammo said Verizon’s efforts around Internet of Things (IoT) and OTT will extend to its 100 million subscriber base. In IoT alone, he said that Verizon has seen $600 million to date in revenue for that market and is projecting growth of 45 percent year-over-year for that category.  However, no new network provisioning or management of IoT was disclosed.
Verizon introduced Verizon Vehicle earlier this year, an after-market connected car service that will add on to accounts and be available to non-subscribers for $15 to $13 per vehicle per month.

Verizon’s as-yet unnamed OTT video service is finally nearing a launch date after years of planning and development. Marni Walden, who heads Verizon’s Product and New Business Innovation, will be leading the new video operation.
Shammo reiterated the roles a number of assets like Verizon Digital Media Services, EdgeCast, upLynk and OnCue will play in the service. He also said that Verizon’s LTE multicast technology, which the carrier has demoed at live events like the Super Bowl, will be a component of the service.  That implies it will be a mobile video service that probably won’t compete with VZ’s FiOS TV service which offers both real time/linear TV and VoD to fiber to the home subscribers

Mr. Shammo has previously indicated that Verizon’s OTT service will not be a linear-TV model like DISH’s new Sling TV offering.  In terms of growing Verizon’s wireless business, Shammo said is looking at four percent top-line revenue growth and focusing less on ABPU and ARPU as service and equipment revenues continue to shift in the wake of an industry-wide move toward EIP programs.

Of course, all wireless carriers, especially AT&T and Verizon, could have good reason to be concerned about future growth given Google’s recent confirmation that it will be entering the market as an MVNO. Google’s move could potentially squeeze wireless pricing depending on what kind of offers the company puts forward.  Shammo said that he isn’t overly concerned at this point:

“One will have to see how they execute on that and see how the market responds to that and then we’ll act accordingly,” Shammo said, according to a Seeking Alpha transcript.

We wonder how AT&T, Sprint and T-Mobile will respond to the forthcoming VZ OTT service…..