[Satellite News 01-06-10] Verizon Chairman and CEO Ivan Seidenberg told investors at a New York conference that its rumored acquisition of DirecTV was not considered a priority for the company and that the satellite operations do not fit with Verizon’s core business.
    "Do we need to own satellite assets? We have not come to the conclusion that this is a strategic imperative," said Seidenberg, who then asserted that improving its relationship with DirecTV was a priority and that the two advertising partners need to find better ways to work together even more efficiently.
    Seidenberg referred to industry rumors that Verizon might buy DirecTV, which started in December after DirecTV split with Liberty Media and Chairman John Malone appointed Michael White, formerly of PepsiCo., as DirecTV’s new CEO. Malone, at the time, would not rule out selling the company to AT&T or Verizon Communications and in an interview with Bloomberg News said the two phone companies have strong ties to the DirecTV’s business model. “Our relationship will continue to broaden and intensify. It may lead to some more ownership-oriented relationship, or it may not," he said.
    Malone then walked back his earlier statements in an interview with CNBC, but said that the company would at least listen to offers. "If somebody wants to buy DirectTV, they can call up Mike White or me and we’ll talk to them," he said. However, Malone added that a merge with a major telephone company in the United States would be difficult to clear regulatory hurdles.
    The economic strength of these proposed partnerships have yet to be proven. Verizon’s financial results are just as mixed as the messages between the alleged negotiating parties. While analysts have been expecting Verizon’s 2009 earnings-per-share to drop to $2.45 from $2.54 in 2008, the company said expects to beat its own target for subscriber net additions of 1 million for the most recent quarter.
    But Seidenberg said that the company faces limited growth created by national unemployment. “While economic indicators are pointing towards improvement, the unemployment figures aren’t tracking at the same rate. The other problem facing business is the anticipated rise in government costs such as taxes and regulatory fees. Companies are holding off on making any major investments or growing their businesses ahead of the expected higher costs,” he said.
    According to Seidenberg, Verizon will have a "continuous focus" on cost reduction in 2010 due to a combination of economic and enterprise weakness, along with access line losses that affected the company in 2009.