Verizon Wireless - a subsidiary of
Verizon Communications Inc.
) - and
) have entered into an alliance to exchange wireless services in
markets like Santa Cruz, Capitola, and Watsonville. These
services would include a variety of offers and incentive packages
pertaining to video, phone, Internet and wireless services.
These offers include Visa prepaid cards valued up to $300,
Comcast HD DVR for six months and complimentary 12-month upgrade
to Blast!, an Xfinity Internet service provided by Comcast.
The addition of Comcast services in Verizon markets is
expected to boost the LTE services of Verizon. In turn, Compacts
will benefit from the broad market base of Verizon, which would
translate into more business for the former. Beyond the initial
launch, both the companies expect to expand their combined
services in other key markets including New Hampshire, Ohio,
Pennsylvania, Texas, Vermont, Virginia and West Virginia.
With respect to Wireline business, Verizon is committed to
improving long-term profitability through product streamlining
and process simplification initiatives as well as cost management
actions. Verizon expects the enterprise business to contribute
more to wireline revenues and profits.
Additionally, Verizon is seeking new ways such as new pricing
actions, FiOS Quantum, copper-to-fiber migration and cost-cutting
measures to drive FiOS revenue growth and maximize profitability.
The new FiOS pricing plans (set-top boxes and planned bundled
changes) would accelerate consumer revenue growth for the next
Further, Verizon entered into mobile video streaming market
with the introduction of "Viewdini" in May this year. The
Viewdini allows searching for a particular title, topic, artist
or keyword from a variety of the Web's leading content providers
- such as Netflix, Hulu Plus, mSpot, broadcaster and movie-studio
websites, Verizon's FiOS, Comcast Xfinity TV and other cable
Apart from the agreement with Comcast, the company will also
launch nationwide video rental and online streaming services in
) in August this year. We believe the entrance into mobile video
streaming is highly beneficial to Verizon, as it will attract new
subscribers and add a new line of business, thereby drawing
We have a long-term Neutral recommendation on Verizon. The
stock retains a Zacks #3 Rank, implying a short-term (1-3 months)
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