Verizon (VZ) - Get Report Chairman and CEO Lowell McAdam and the telecom's senior managers held forth on merger buzz, unlimited data plans, Comcast's (CMCSA) - Get Report new wireless agreement with Charter (CHTR) - Get Report and other topics during the telecom's analyst meeting after the close on Monday.
Anticipation of deals has spiked since the Federal Communications Commission recently ended a quiet period prohibiting strategic talks between participants in a wireless spectrum auction. The restrictions on talks are meant to prevent collusion on bids. Verizon's recent disclosure that it might take longer than expected to reach its targeted credit rating improvements raised questions about whether it might raise debt for an acquisition.
"There is an awful lot more hype in the marketplace than there is in the business community right now," McAdam said of merger talks.
Verizon, AT&T (T) - Get Report , Comcast, Dish (DISH) - Get Report , T-Mobile USA (TMUS) - Get Report and others were barred from talks for more than a year by the FCC. The lifting of the quiet period and the Trump administration's anti-regulatory views have spurred expectations for deals among wireless carriers, cable companies and large tech companies like Alphabet's (GOOGL) - Get Report Google and Amazon.com (AMZN) - Get Report .
While the story was fairly reported, McAdam said, it changed the priorities. "We prefer to grow organically," he said.
"I like to consider myself a polite and hospitable person," he added, and would pick up the phone if Comcast or one of the others called.
"We don't feel the urgency that seems to be out there in the analyst community, the banking community and the media," McAdam said.
Comcast and Charter have agreements to resell Verizon's service. The cable companies announced a new agreement Monday to explore ways to work together to develop wireless platforms, improve device logistics and otherwise improve their services. As part of the agreement, neither Comcast nor Charter can buy or sell themselves to a wireless company for a year.
The terms squelch the notion of a Verizon purchase of Charter for the next year--even if the likelihood of a deal materializing was never very high. McAdam said there is no change in relationship with the cable operators.
Verizon raised questions about its appetite for acquisitions with a Friday Securities and Exchange Commission submission noting that the telecom does not expect to meet its prior time frame for improvements to its credit ratings. McAdam told investors that Standard & Poor's decided it would change the ratios it uses to gauge balance sheet risk, not that Verizon had changed its position.
AOL boss Tim Armstrong laid out ambitions for Oath, the digital media group that will include Yahoo! (YHOO) , AOL and Verizon's other digital media properties. Armstrong wants the group to grow from from 1.3 billion consumers on its platform to 2 billion by 2020, and for revenues to hit $10 billion to $20 billion in sales by 2020.
Armstrong sees AOL's position akin to the way Facebook (FB) - Get Report dominates social media and Google dominates search. "We're going to be brand advertising," he said. Jim Cramer and the AAP team noted recently on Facebook's efforts to defend its social media lead over Snap (SNAP) - Get Report . Get a free trial subscription to Action Alerts PLUS.
Verizon finally entered the unlimited data scrum in the first quarter. "Unlimited is not the end state, it's just the next step," McAdam said.
McAdam said Verizon is "very satisfied with the outcome" of the unlimited plan, though the first quarter was a disappointment with the loss of subscribers.
"First Q was not our finest hour," McAdam conceded, but said the company is set to deliver in "second Q, the remainder of '17 and beyond."
Editor's pick: Originally published on May 8 at 8:17 p.m.
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