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Verizon CFO: LTE Multicast ‘Pivotal’ To Mobile Video

Verizon Communications continues to be a champion of LTE multicast, viewing the technology as “pivotal” to the mobile distribution of video and other forms of data, company EVP and CFO Fran Shammo said Tuesday at the Oppenheimer 17th Annual Technology, Internet & Communications Conference in Boston.

Although the technology is about a year out for Verizon, as it starts to embed it in chips in the fourth quarter of this year, it has the potential to deliver video to “millions of customers” without gobbling up all of the carrier’s spectrum and network capacity, he said, according to a transcript of his Q&A at the event.

“Multicast technology…is really, I think, the pivotal point that starts to change the way content is delivered over a mobile handset, which opens up content into the wireless world,” Shammo said.

On Verizon’s second quarter call last month, Shammo said Verizon Wireless plans to “go commercial” with an LTE multicast product as early as next year. LTE Multicast can deliver live TV signals wirelessly to mobile devices more efficiently than unicast delivery because multiple users can watch the same multicast stream being delivered from a cell site. Verizon demonstrated LTE Multicast in January in New York in the week leading up to the Super Bowl matchup between the Seattle Seahawks and the Denver Broncos.

Shammo said Verizon has 98% of the country covered with LTE, noting that 55% of customers are now on it and generate almost 79% of data usage. Verizon Wireless, he said, still has about 42 million customers that rely on 3G technology.

“That in itself is an engine for ourselves and other carriers to upgrade those customers into a 4G environment to experience the video,” he said.

Shammo also addressed Verizon’s wireline activities, including its ongoing process of converting customers from copper to fiber, a project that got underway more than two years ago. He estimated that Verizon’s completing about 300,000 copper-to-FiOS conversations a year, with another 1 million homes left to convert between now and into 2015.

Among benefits, the conversions are reducing t ruck rolls, providing faster Internet speeds, and generating between $13 to $15 more per month in revenue, Shammo said. “So it is a quick payback when we do each one of these conversions.”

Shammo was also asked if Verizon will follow Windstream Communications and perhaps spin ome of network assets, such as copper lines in more rural areas, as a real estate investment trust (REIT), a move that give the carrier some potentially significant tax breaks.

Shammo called it a “really nice transaction for Windstream, but believes it’s a “more complex” strategy for Verizon to pursue. “We actually have looked at that in detail. We continue to look at that,” he said.