Summary
Verizon Communications Inc. (VZ) provided an update on its strategic initiatives and financial outlook at the Bear Stearns Media Conference on March 10, 2008. The company emphasized its continued investment in networks and new technologies to drive sustained organic growth and innovation. Verizon anticipates strong fundamentals, positive momentum, and continued revenue growth in 2008, mirroring the performance seen in 2007. The update highlighted specific growth targets for both Verizon Wireless and Verizon Wireline. For its wireless segment, Verizon aims for strong retail subscriber growth, double-digit annual revenue growth, and robust EBITDA margins. For its wireline business, the focus is on driving top-line growth in FiOS (fiber-to-the-premises) and global enterprise, alongside efforts to improve margins and enhance subscriber retention through its FiOS triple-play offering. Notably, Verizon increased its FiOS TV penetration forecast for 2010.
Key Highlights
- 1Verizon forecasts continued strong revenue growth in 2008, building on 2007 performance.
- 2Verizon Wireless targets double-digit annual revenue growth and EBITDA margins of 43-45% on service revenues over the next 3-5 years.
- 3New 'Nationwide Unlimited Anytime Minute Plans' are showing strong subscriber and revenue accretion.
- 4Broadband access data plans are expected to stimulate demand and growth for data services within Verizon Wireless.
- 5Verizon Wireline is focusing on growth in FiOS and global enterprise, aiming for EBITDA margins of 30-33% over the next 3-5 years.
- 6FiOS TV is proving effective in retaining access lines, with significant improvements in line loss in areas where it's deployed.
- 7Verizon increased its 2010 FiOS TV penetration forecast to at least 25%.