Last updated: February 21, 2008 - 12:34am
[SOURCE: Washington Post, AUTHOR: Arshad Mohammed]
His company's stock has sunk, its debt has been downgraded, and its investment in a new fiber-optic network is regarded by some as a pipe dream, but Verizon Communications Inc.'s chief executive is certain he is doing the right thing. "This is almost religious . . . religious with proper financial accounting," Ivan G. Seidenberg said. Seidenberg is faced with deep skepticism on Wall Street about Verizon's multibillion-dollar investment in a fiber-optic network to carry TV, high-speed Internet and old-fashioned phone service. When it's all said and done, the growth opportunity here will be far greater than anybody is accepting at this point," he said, suggesting that Verizon's fiber-optics project could someday allow people to consult their doctors by video link, to telecommute in numbers large enough to reduce global warming and to enjoy services not yet dreamed up. Doubts about the undertaking -- which is called Fios and is expected to give consumers far greater bandwidth than Verizon's main competitors now offer -- have helped drag the company's stock down by more than 10 percent over the past year and influenced Moody Investors Service's and Standard and Poor's Corp.'s recent decisions to downgrade Verizon's debt. Analysts are particularly worried about the company's spending on Fios as Verizon's traditional local phone business shrinks -- it lost nearly 3.5 million lines last year alone -- in the face of competition from cable, wireless and Internet phone providers. Company officials say the line losses are easily offset by growth from Verizon Wireless Inc., high-speed Internet and long-distance service. To Seidenberg, wireless is another example of an area where the company had the vision to make early investments over the objections of skeptics -- and now it's driving the company's growth.
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