Interactive

There’s “pent-up demand” around virtual reality (VR), Verizon Communications CEO Lowell McAdam said during a May 24 keynote presentation at the J.P. Morgan Global Technology, Media and Telecom Conference in Boston. But he predicted it “may be five years or 10 years out before it becomes big.”

And if VR does become big, there’s potential for industrial, enterprise and entertainment applications for the technology, he said.

Outside of his VR predictions, McAdam addressed how his company approaches content, stressing that Verizon is perfectly happy to continue partnering with content companies and doesn’t see any need to invest in a large network operation. “The one thing that I try to think about is core competency,” he said, adding he’d put his “team up against anybody in the world on the network side.” But, “as you go up into platforms and things like content, it’s not exactly our strong suit,” he conceded. Therefore, Verizon has partnered with content creators including DreamWorks Animation and networks including CBS, he said.

“I think we want to crawl, walk and then run,” he said of Verizon’s plans in the content arena. Then, guessing that he would be asked if Verizon wants to buy a big network company, he said: “We’re not doing that. I don’t think we need to do that.”

Verizon has about 30,000 outlets for its service, he went on to say. Of those, it owns about 2,000 and, “by owning those, making those a cornerstone, you can really influence the broader distribution market and we do those through partners,” he said. “I think content is a very similar strategy for us.”

As Verizon had expected, broadband is “starting to outsell TV by a significant margin,” he also said at the conference. Verizon introduced its own custom, “skinny” TV bundles this year and those have been “consistently about 40% of our sales, so customers clearly want that,” he said.

“Far and away the largest driver of traffic on a mobile network is video at this point,” and Verizon is “seeing it grow … in the big data streams growing 50% year over year,” he said. Citing an unspecified third-party study, McAdam said video had doubled year-over-year across the broader telecom networks, and “that’s very consistent with what we see,” he said.

Technology used in Apple’s iPhone had “opened the door to the innovation which spurred growth” in the industry, he also said. The “leap from 3G to 4G was a bit more of a leap of faith than the leap from 4G to 5G” cellular phone service is going to be, he predicted.

He vowed that Verizon would “lead” on 5G and “probably lead on 6G, whenever that comes.” When it comes to the introduction of 5G, he said: “I don’t think we have to wait a long time.” But he cautioned that “there is a distinction between 5G in a fixed wireless environment versus a mobile environment, and those that are working on standards say mobile is more like a 2020 phenomenon.” That’s an estimate that he “wouldn’t argue with,” he said.