Verizon Cfo: Wireless Sees Some Bad Debt in Midwest

NEW YORK -(Dow Jones)- Verizon Wireless has seen some pockets of bad debt in the Midwest, said Verizon Communications Chief Financial Officer Doreen Toben, who added that the weakness was "relatively insignificant."

There are a higher number of customers who have been disconnected because they can no longer pay their bills in that region, also known in the industry as bad debt or non-pay disconnects. But the extent of those disconnects isn't significant enough to be seen in the financial numbers, Toben told analysts at a Bear Stearns conference Monday. The event was Webcast.

Verizon also expects its FiOS TV service to achieve at least 25% market penetration by the end of 2010, Toben said. The company previously forecast penetration rates between 20% and 25%.

Toben reiterated that Verizon's overall FiOS investment is expected to generate positive earnings before interest, taxes, depreciation and amortization this year, and positive operating income next year.

Verizon Wireless, jointly owned by Verizon and Vodafone Group, also sought more prepaid customers in the fourth quarter, and Toben said to expect similar numbers in the future. Verizon Wireless expanded its handset selection for prepaid customers.

The company had previously neglected the prepaid market and focused on the more lucrative post-paid customers, who sign long-term contracts and typically pay a higher bill.

"We see prepaid as an opportunity," Toben said. "We felt in the past we left some money on the table."

Still, Verizon Wireless' move to prepaid - through a new service called Inpulse - is an illustration of the maturing market and the move to seek new areas of subscriber growth by all carriers.

Toben told analysts that she was pleased with the results of the $100 unlimited calling plan.

"I consider it an accretive event," she said, adding that it was helping with gross additions.

Verizon Wireless was the first to launch an unlimited calling plan, which was quickly followed by AT&T and Deutsche Telekom's T-Mobile USA. Sprint Nextel followed suit a few days later with an unlimited plan that covers everything.

Verizon Wireless has been a cost leader, and Toben said she doesn't believe the carrier will have to add services or cut the price of its unlimited plan.

On the small and medium-sized business and large corporate markets, Toben said she has seen little signs of a slowdown.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 10th March 2008

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