Verizon's Shammo: 2011 to focus on reducing landline losses, expanding FiOS, cloud services

Verizon (NYSE: VZ) may continue to face challenges in dealing with losing landline voice subscribers, but its newly appointed CFO Fran Shammo believes that there's plenty of growth opportunities in fiber-based broadband and cloud-based services for enterprises.

Speaking at this week's Morgan Stanley Technology, Media and Telecom Conference this week, Shammo said on the consumer side, the focus not surprisingly will be on expanding its FiOS data and TV base where "180,000 to 200,000 are our sweet spot where we can grow, but also contribute additional margins to the bottom line as we showed throughout in 2010."  

At the same time, the other goal on the consumer side will center on driving down access line loss.  

"If you watched us, we have gone from 2009 terms of 10-11 percent and exited 2010 in the mid nines so we think we're on a good curve where that access line loss is starting to slow and I think that will even out a bit," Shammo said.

Echoing a similar tone set by company Chairman and CEO Ivan Seidenberg, Shammo believes that in the enterprise business market segment, Verizon's strategy will focus on expand its cloud services strategy and other higher margin strategic services.

Proof of the growing cloud services strategy was seen with its recent purchase of Terremark. By purchasing Terremark, Verizon will get an additional 13 data centers in the U.S., Europe and Latin America along with a number of federal government customers.  

"As we go into enterprise, it's all about executing on our Terremark acquisition, which is part of our cloud strategy," Shammo said, adding that it will "accelerate us from a build versus buy strategy within two years."

Shammo added that its acquisition of Terremark will enable to quickly expand its data center capabilities to support cloud and managed services because it has plenty of facilities that have ample amount of space left. Since buying Terremark, Verizon decided to put its own organic data center build in Buffalo, NY on hold.

"The great thing about the Terremark acquisition is that in Miami data center there's three floors that are empty, and within the Culpepper, Va. facility there are six empty pads left in that facility, meaning there's an additional 5,000 square feet that can still be built out," he said. "The expansion from a data center perspective is not an issue, and by buying these assets it's a lot more capital efficient to expand what Terremark already has."

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