Verizon Expands Asia and Europe Networks
In 2009, Verizon Business will aggressively expand its network services throughout Asia by constructing submarine cables, intended to link countries across four continents. Verizon’s Trans-Pacific Express (TPE) cable, which currently connects the United States to China, will be extended to include India. Operating at a distance of more than 11,000 miles, the TPE has an operating capacity of 3.2 Tbps. The submarine cable, connecting China, South Korea, Taiwan and the United States, began operating in September 2008. The TPE is a $500 million joint project funded by 6 telecommunication companies, including Verizon.
Lengthening the TPE is not Verizon’s only venture for 2009. The company is also continuing its efforts to expand the Europe India Gateway (EIG) cable, which will span 13 countries from India to the Middle and Europe. Expected to be functioning by July 2010, the EIG will begin in the U.K., continue through France and Portugal and then pass through Mediterranean. The EIG will terminate in India, via the Indian Ocean, after passing through the Red Sea.
"This cable will solve a big piece of the puzzle of how we get to link Europe, the Middle East and Asia," said Verizon Business’ Vice President for Global Network Planning, Ihab Tarazi.
According to Tarazi, Verizon’s Indian expansion will encompass its largest investments in 2009. Upon completion, Verizon will no longer have to rely on Indian carriers to deliver its services. Europe and Asia won’t be the only regions to experience major upgrades. Verizon Business is still working to improve routes in the U.S. with 100Gbps technology. Still in testing, 100Gbps has the goal of being deployed in 2010.
Verizons Chief Officer Will Retire
Just a week after reporting fourth-quarter earnings, Verizon Communications Inc. Chief Financial Officer Doreen Toben said she plans to retire around the middle of this year, after a two-decade career in which she integrated major acquisitions and sold the company's high-priced fiber optic broadband network to skeptics on Wall Street.
Ms. Toben has been chief financial officer since 2002. In an interview, she said she was leaving for personal reasons. "I've had the job for seven years. It's very taxing on your life," she said. Though she is 59 years old, Ms. Toben is eligible for retirement because of her long career at Verizon.
Her last major task was to arrange debt financing for Verizon's $28.1 billion purchase of Alltel Corp., which closed last month. Raising the money proved especially difficult after the credit markets froze last fall, and for a time investors wondered if the deal would go through. "Getting the financing during this difficult time was quite an achievement," Ms. Toben said.
The company said they are planning to name a successor shortly.
One of Ms. Toben's biggest challenges came in 2005 and 2006, when she had to persuade critics on Wall Street that Verizon's huge investment in the FiOS fiber-optic TV and Internet service -- a project with an estimated price tag of $18 billion through 2010 -- would pay dividends.
The FiOS rollout damped Verizon's earnings but has recently begun to turn a corner. The company now has 1.9 million FiOS TV subscribers, or about one in five of the potential customers it reaches, up from a penetration rate of 16% a year ago.
The next Chief Financial Officer faces the challenge of steering Verizon through a steep decline in landline revenue as consumers and businesses drop landlines and pull back on spending. Reining in costs is part of the equation. Ms. Toben told investors on a conference call last week that Verizon will reduce capital spending next year.
Ms. Toben, who serves on the board of New York Times Co. and several nonprofit organizations, said she would consider joining some more corporate boards after leaving Verizon.
Verizons Fiber Optic Technology
Verizon can get more digital data to a customer via a fiber-optic line than a copper line. With more bandwidth than a traditional copper cable, Verizon is relying on those lines to give customers clearer and faster video and Internet transmissions.
With crisper video, up to 100 high-definition channels and reams of interactive and on-demand video applications, fiber is the future of television. In addition, with so much fiber-optic line already laid, the potential to tap new customers is immense.
To have a fiber-optic connection is a key difference that separates Verizon it from competitors who have relied on copper wire for so long.
Across the country, it has cost the company more than $20-billion to establish a fiber-optics infrastructure, officials said.
"Everybody wants faster and faster speed and they are demanding more channels, fiber can deliver that. They've been the most aggressive in terms of laying down fiber,” said Joseph Bonner, an analyst with The Argus Research Co. in New York
There are signs, though, that people are buying into the idea of a multimedia television experience.
"The last six to nine months, they are actually gaining subscribers," Bonner said. "They gained about a million subscribers in the first year or so." It is a good start for what was once a phone company, which had to change as the cable industry realized it could bundle video, telephone and Internet applications over the same line.
"We're building the network today, not just for today, but also for tomorrow," Bonner said.
It may be more aggressive than its competitors may be, while touting the ability to run a fiber-optic line all the way to a television set, but cable companies and other content providers such as AT&T are not just sitting back, he said. As the economy worsens, calls to install the service have been high, and Verizon officials attribute that to customers wanting to consolidate their entertainment experience at home on their television set.
However, officials are also looking beyond the moment. They believe that fiber is the future.
Verzion Collapses Landline Support Numbers
It has just been announced that Verizon has launched a new national customer service number, 1-800-VERIZON – for its landline customers, replacing as many as 100 different numbers now in use. Customers that are needing help can dial that number from their landline phone, and the call is automatically routed to the appropriate customer service center, or dial from any phone, including a cell phone, and can report the problem before being routed to the appropriate customer service center that customers particular need.
“We wanted to take the burden off our customers’ backs and put it on our own,” said Bob Elek, Verizon spokesperson. “Now they won’t have to hunt around anymore.”
The new single-number system uses some proprietary, Using Verizon IT experts’ new patent-pending technology to knit together the customer service operations and the many disparate numbers, Elek said. There are more changes to come, including possibly linking Verizon Business and Verizon Wireless to the same customer support operation.
“But that’s down the road,” Elek said. “We need to crawl before we run.”
“The new system has been put in service on a market-by-market basis before having it announced nationally and has performed well,” Elek said. Also yet to come are the process or staffing changes that may result from this new approach to customer service.
Verizon sees the potential of this revolutionary way of handling customer service needs to be used in businesses all over the world in the near future, and Verizon is going to be there to lead the way. Not only is it going to be a benefit for the businesses, the customers will stand to benefit the most form these changes.
More Services in More Places
Verizon in 2008 expanded Internet and TV services to more customers, boosted broadband speeds and availability, added more cities to the FiOS TV service area, provided more than 100 FiOS high-definition (HD) channels in every FiOS TV market, and introduced new, interactive TV features that now lead the television industry.
The bold initiative to build fiber-optic facilities right to customer premises is paying off, with more than 2.5 million FiOS Internet and 1.9 million FiOS TV customers connected as of year-end, each up about 1 million customers in 2008. During the year, Verizon also continued expansion of its DSL-based Internet service and increased the fastest download speed to 7.1 megabits per second (Mbps).
Verizon's revolutionary project to construct the all-fiber-optic FiOS network straight to homes, apartments and businesses exceeded the original year-end goal of 12 million homes passed, and the network can now serve 12.7 million homes and businesses.
"Throughout 2008, and especially in the final quarter, we waged a major assault on old-fashioned cable both by offering new services and by serving more customers," said Dan Mead, president of Verizon Telecom. "We leveraged not only our fiber network, but our High Speed Internet assets and our partnership with DIRECTV, and created the kinds of bundles and offers that appeal to customers and will grow our business.
"The combination of our great networks, products and the experience of the Verizon team will continue to be a winning formula as we move forward into 2009," he said.
The company also began to pursue multimedia content for its broadband customers by endorsing a new, network-efficient process for peer-to-peer file delivery, creating its own content delivery network (CDN), and giving content owners and CDNs direct access to the Verizon Internet backbone.