Verizon Wireless 2009 Annual Report Download - page 5

VERIZON COMMUNICATIONS INC. 2009 ANNUAL REPORT
new LTE network will be up to 10 times faster and much more cost-effi cient than today’s wireless
technology. Since acquiring prime spectrum for this build-out, we have selected technology
partners and conducted extensive tests of LTE in Boston and Seattle. We will begin to offer
commercial service later in 2010 and are in a great position to extend our leadership in the next
phase of growth in the wireless industry.
We are also priming the innovation pump for the coming explosion of smart devices,
multimedia applications and machine-to-machine communications. We started our own
innovation lab, opened our network to outside developers, and are working with partners such as
Qualcomm, Skype and Google to create new devices, applications and services, and we have joined
with China Mobile, Softbank Japan and Vodafone to create a Joint Innovation Laboratory to foster
application development worldwide. We expanded our portfolio of smart phones and devices, one
of which – the Motorola Droid smart phone, based on Google’s Android operating system – topped
Time’s list of the best new gadgets of 2009.
In broadband, the Internet is evolving from a text-based to a visual medium. We expect video
will grow from about half of Internet traffi c today to as much as 75 percent over the next fi ve years.
In anticipation of this trend, Verizon has spent several years redefi ning our consumer telecom
business around broadband and video by deploying an all-fi ber network called FiOS that takes
high-capacity fi ber all the way to customers’ homes – giving us the optimal platform for delivering
the high-defi nition, interactive digital experiences that customers have been waiting for.
Five years into this project, we now pass 15.4 million homes with this intelligent, ultra-
broadband network – including major markets such as New York, Washington, D.C., Philadelphia
and Pittsburgh – and we’re well on our way to our target of about 17 million. FiOS revenues grew
56.5 percent to $5.5 billion in 2009, which drove a 1.6 percent growth in consumer revenues –
extremely important as the traditional voice business is declining. We ended 2009 with 3.4 million
FiOS Internet and 2.9 million FiOS TV customers, and surveys by J.D. Power and PCMag.com
consistently rate FiOS as the #1 service in the marketplace.
To further differentiate our fi ber platform, we are also introducing a steady stream of new
features such as photo-sharing, Facebook, Twitter and Caller ID on the FiOS TV screen and are
working with developers to encourage innovation for the home environment. As this ecosystem of
applications evolves, Verizon is well positioned to make the fi ber-connected smart home a hub for
managing every phase of our customers’ digital lives – from media and entertainment to energy
management to home security, healthcare and more.
Not surprisingly, the economy took a toll on our business revenues in 2009. However, revenues
from strategic business services such as Internet Protocol (IP), consulting and managed services
$7.4
$10.7
$16.0
Wireless
Data Revenue
(billions)
07 08 09
$51.57 $51.88 $51.00
Wireless Retail
Service ARPU
07 08 09
3
On network superiority:
“Our investment in intelligent network technology will support the growth
of the Internet well into the 21st century. The incredible speed and bandwidth
in our FiOS and global IP networks uniquely position Verizon to handle
the explosion of Internet and video traffic we’ll see in the years ahead. The
advanced services and solutions we’re able to offer on these intelligent
networks will enhance lives and empower businesses.”
- Fran Shammo, President – Verizon Telecom & Business
On operational efficiency:
“We remain focused on transforming operations and driving process efficiencies
to reduce costs, improve service and enable growth. We’re using our scale to
standardize network, supply chain and major transactional functions to unify
the customer experience across our global operations. Last year we expanded
our FiOS and global IP networks in key growth markets; reduced our real
estate, supply chain and finance operational expenses; and expanded our
Environmental Sustainability Project to make our operations even more efficient.”
- Virginia Ruesterholz, President – Verizon Services Operations