Verizon rivalry with SBC predicted

Wireless giants expected to vie for landline clients

June 08, 2005|By Jon Van | Jon Van,CHICAGO TRIBUNE

CHICAGO - Two of the nation's leading phone company executives offered a glimpse of the industry's future at an industry trade show in Chicago yesterday.

David W. Dorman, chairman of AT&T Corp., which is to be acquired by SBC Communications Inc., said at the SuperComm trade show held at McCormick Place that the merger - along with the proposed acquisition of MCI Inc. by Verizon Communications Inc. - would spur a vigorous rivalry between the nation's two largest local phone carriers.

SBC and Verizon compete for wireless customers but have never been rivals for landline residential customers, Dorman noted. That will change as Internet telephone service displaces traditional wired phone service to the home, he said.

"I'd guess that among people aged 18 to 25, those that use wireless phones exclusively is more than 50 percent," Dorman said. "When those people reach the age of 26 or 27, they're not going to suddenly change their habits."

Dorman said consumers increasingly will rely on wireless phones as their main tool of voice communications, with Internet phone service as a complement. Once their merger is completed, SBC will market AT&T's Voice over Internet Protocol nationwide, Dorman predicted.

Ivan G. Seidenberg, Verizon's chairman and chief executive, addressed a different type of competition in the industry.

Seidenberg said cable television operators are doing all they can to slow Verizon's entry into video. Cable operators argue that Verizon, SBC and other phone companies seeking to offer video should go through the same franchising process that applies to cable operators.

Verizon is willing to pay franchise fees equal to those cable companies pay, but Seidenberg said it is wrong to require a company that would be the third or fourth competitor in a market to be subject to the same requirement imposed when cable operators were given a municipal monopoly.

Seidenberg also predicted that broadband Internet service, used by fewer than 30 percent of consumers, will account for more than 60 percent of the market within five years.

Its popularity will mirror that of wireless phone service, which has continued to surprise analysts, he said.

The Chicago Tribune is a Tribune Publishing newspaper.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.