Total Pageviews

Wednesday, April 07, 2010

A Conversation with Ivan Seidenberg (Verizon CEO)

Via Dave Burstein:
QUESTIONER: Hi. It's Jose Maraillon (ph), from Telefonica...  I think that we will agree here in the sector and out of the sector that we are going to have this explosion of data; you know, (people ?), video. But the real challenge for operators like you or like us is how are we going to monetize that explosion. Because people are used to flat rates. I'm not sure people are -- well, I'm sure they are not willing to pay, or to pay more. So I would like to see or to hear from you the strategy you are putting in place to monetize that explosion of data.

SEIDENBERG: This is -- thank you for the question. Thank you for your comment. This goes to my investors so they don't think we're crazy. So when you look at this question -- so let's look at the dichotomy between a carrier and the Silicon Valley types. So most people think a carrier wants to charge for every minute on a linear basis in perpetuity, infinity. That's what you guys think, right? You're right, when we do that. We don't really want to do that. What we want to do is give you a chance to buy a bundle, a session of 10 megabits or a session of 30. The problem we have is 5 or 10 percent of the people are the abusers that are chewing up all the bandwidth. That's what happened with music and all that kind of thing. So what we will do is put in reasonable data plans, and we've done this. We've just introduced a $30 data plan that does with every one of our BlackBerrys or smart phones, a 10 (dollar) or a $30 data plan that covers the majority of people who feel that's a fair price. I get to use it for 30, 40 hours and I pay a certain rate. But when we now go after the very, very high users, the ones who camp on the network all day long every day doing things that -- who knows what they're doing -- those are the --
MURRAY: It's video, right? I mean, it's video.
SEIDENBERG: But those are the people we will throttle and we will find them and we will charge them something else. Now, the dilemma we have is that government will come in and say well, I'm not sure we want you to do that.
MURRAY: Net neutrality. We want --
SEIDENBERG: Net neutrality could be used against that. So the issue is, to answer the question is we don't want to have a linear pricing scale. We do want to find a way to give the majority of people value for bundles, but we have to make sure we find a pricing plan that takes care of that 10 percent that's abusing the system. And it's that simple. And therefore you have to have rules, give us discretion to run our business. Net neutrality could negate the discretion to run your business, and -- if you take it to its ultimate extreme. So that's just an example.

No comments: