Verizon Communications Inc. (Verizon)

Verizon Communications Inc. (Verizon)

 

Verizon Communications Inc. (Verizon), incorporated in 1983, provides communications services. Verizon has two segments: Wireline and Domestic Wireless. The Company's Wireline business provides telephone services, including voice, network access and nationwide long-distance services, broadband video and data services, and other communications products and services globally in 150 countries. Its wireline business also owns and operates one of the global Internet protocol (IP) networks. The Company's domestic wireless business, operating as Verizon Wireless, provides wireless voice and data products and services across the United States using domestic wireless networks.

 

In July 2007, the Company announced that Verizon Business has completed its acquisition of Cybertrust. In March 2007, Verizon completed the sale of its interest in Telecomunicaciones de Puerto Rico, Inc. (TELPRI) to a subsidiary of America Movil, S.A.B. de C.V. America Movil, S.A.B. de C.V.'s subsidiary purchased 100% of TELPRI, the holding company of Puerto Rico Telephone Company (PRT), including Verizon's 52% interest. On January 6, 2006, Verizon acquired MCI, Inc. (MCI), a global communications company that provided Internet, data and voice communication services to businesses and government entities throughout the world and consumers in the United States. The Company has incorporated MCI's operations into its wireline business. During the year ended December 31, 2006, the Company sold its 100% indirect interest in Verizon Dominicana C. por A. (Verizon Dominicana). On November 17, 2006 the Company completed the spin-off of Idearc. On January 16, 2007, Verizon announced a definitive agreement with FairPoint Communications, Inc. (FairPoint) that will result in Verizon establishing a separate entity for its local exchange and related business assets in Maine, New Hampshire and Vermont, spinning off that new entity, and immediately merging it with and into FairPoint.

 

Wireline

 

Verizon's Wireline segment, which includes the operations of the former MCI, comprises two units: Verizon Telecom and Verizon Business. Verizon Telecom provides local telecommunications, broadband data and video services in 28 states and Washington, D.C., as well as nationwide long-distance and other communications products and services. Verizon is deploying a fiber-to-the-premises network under the FiOS service mark. The Wireline segment also includes Verizon Business, a provider of next-generation IP network and information technology (IT) products and services to medium and large businesses and government customers. Verizon Telecom consists of three lines of business, which operate across the Company's telephone subsidiaries and focus on specific customer market areas.

 

The Company's Mass Markets line of business markets communications and information services to residential customers and small businesses, including basic telecommunication service and end-user access; value-added services, such as voicemail, caller ID and call forwarding, and broadband services, which include digital subscriber lines (DSL) and fiber optics to the premise (FiOS data and FiOS television services). Its long distance subsidiary provides national and international long distance services in all 50 states to residential and business customers, including calling cards, 800/888 services and operator services. Mass Market revenues in 2006 represented approximately 44% of Wireline's aggregate revenues. These revenues were derived primarily from the provision of telecommunication services to residential users.

 

Verizon's Wholesale line of business markets the Company's long distance and local exchange network facilities for resale to other long distance and competing communications carriers. Wholesale services include switched access, special access, high-capacity, high-speed digital services, unbundled network elements (UNE's) and interconnection revenues from competitive local exchange carriers (CLEC) and wireless carriers. Wholesale revenues in 2006, represented approximately 16% of Wireline's aggregate revenues. Approximately 70% of total Wholesale revenues were derived from interexchange carriers. The remaining revenues principally came from other local exchange carriers, which resell network connections to their own customers. The Company's other services include operator services (including deaf relay services), public (coin) telephone, as well as former MCI dial around services, including 10-10-987, 10-10-220, 1-800-COLLECT and prepaid phone cards. Other revenues in 2006 represented approximately 5% of Wireline's aggregate revenues.

 

Verizon Business consists of three lines of business, which focus on the Company's enterprise business customer's needs. The Company's Enterprise line of business markets voice, data and Internet communications services to medium and large business customers, multi-national corporations, and state and federal governments. The Enterprise Business also provides value-added services, as well as managed network services that enable customers to outsource all or a portion of their communications and information processing operations. In addition, Enterprise Business provides traditional data services in specific markets, such as Private Line, Frame Relay and automated teller machine (ATM) services, as well as advanced IP network services, both domestically and internationally. Enterprise Business's Internet suite of products includes private IP, IP virtual private network (VPN), Web hosting and voice over Internet protocol (VoIP). Enterprise Business revenues in 2006 represented approximately 28% of Wireline's aggregate revenues.

 

The Company's Wholesale line of business focuses on the domestic wholesale services markets, which includes all wholesale traffic in the United States, as well as traffic that originates in the United States and terminates in a different country. Total Wholesale revenue in 2006, represented approximately 7% of Wireline's aggregate revenues. Revenues from Wholesale local and long distance voice products, including transport in 2006, represented 47% of Wholesale's aggregate revenues. Revenues from Wholesale data and Internet products in 2006 represented approximately 53% of Wholesale's aggregate revenues. Verizon's International and Other operations serve businesses, government entities and telecommunication carriers outside of the United States and include the Company's Skytel paging business. The Company's revenues from International and Other represented approximately 6% of Wireline's aggregate revenues in 2006.

 

Domestic Wireless

 

The Company's Domestic Wireless segment, Cellco Partnership doing business as Verizon Wireless (Verizon Wireless), is a joint venture formed by the combination of the United States wireless operations and interests of Verizon and Vodafone Group Plc (Vodafone). Verizon owns a controlling 55% interest in Verizon Wireless and Vodafone owns the remaining 45%. Verizon Wireless provides wireless voice and data services across wireless networks in the United States. The Company has licenses to provide mobile wireless services on the 800-900 megahertz and 1800 -1900 megahertz portions of the radio spectrum. Verizon's wireless offerings include voice services, data services and transmission and content services.

 

Verizon offers a variety of packages for voice services with features predominantly offered on a postpaid basis with a contract term. Specifically, it offers America's Choice plans, which provide a choice in amounts of bundled minutes together with no roaming or long distance charges for calls on the Company's preferred network; family/small group and shared minute plans for multiple-user households and small businesses, and plans targeted to business accounts with over 100 lines and national accounts with over 1,000 lines. In addition, the Company offers a national prepaid product that enables individuals to obtain wireless voice services without a long-term contract by paying in advance.

 

The Company's data transmission and content services offerings include EV-DO, its wide area network packet IP solution, which is marketed as BroadbandAccess, provides data transmission rates on existing applications. In addition, Verizon's 1XRTT digital technology, which is marketed as NationalAccess, enables higher-speed applications, such as e-mail, enterprise applications, image downloads and full browsing capabilities for laptop computer users. With compatible wireless devices, Verizon's customers can send and receive text messages, as well as still pictures and full-motion video clips with sound. The Company's V CAST service, available on EV-DO-enabled handsets, enables customers to access daily-updated videos from content providers of news, weather, sports and entertainment programming. In addition, its V CAST Music service enables customers to download music either directly to their V CAST Music-enabled phones or to their personal computers. The Company's Get It Now service enables its customers to download hundreds of applications to their handsets, such as ring tones, games and wallpapers.

 

Verizon's Mobile Web service offers customized access to content through its portal, and allows customers to access the Internet, e-mail and personal information management tools, such as calendars and address books, through handset-based menus. The Company's location-based service, VZ Navigator, enables customers to obtain audible turn-by-turn directions to their destination, locate various points of interest and access other location-related information by using VZ Navigator-capable handsets. Through its suite of VZOffice services, the Company provides enterprise customers solutions for accessing the Internet and corporate intranet, which allow for optimized wireless access to the customer's corporate applications or databases. In addition, it offers its corporate customers the ability to wirelessly send and receive e-mail using various handheld devices, including wirelessly equipped personal digital assistant (PDA) devices.

The Company competes with AT&T (formerly Cingular), Sprint Nextel, T-Mobile USA. ALLTEL and US Cellular.