Verizon COO: Sees 50% Smartphone Penetration By End Of 2011>VZ

Verizon Communications Inc. (VZ) Chief Operating Officer Lowell McAdam said he expects at least half of its wireless customers to own a smartphone by the end of the year.
Verizon Wireless has a lot of reason to be optimistic. It plans to sell the Apple Inc. (AAPL) iPhone next month. Shortly after, it will release the first of a number of 4G phones. All of this will translate into higher smartphone and data adoption, executives said.
"We expect data growth to explode," Chief Financial Officer Fran Shammo said during the company's investor day event, where he also discussed the fourth-quarter results.
Based on Wall Street's average estimate of 11 million iPhones sold, Shammo said he expects earnings growth of 5% to 8%. He expects that 2012 earnings growth should roughly double, and he agreed to an analyst suggestion of 8% to 16% earnings growth.
Shammo, however, warned that higher iPhone sales could result in lower earnings, but noted that it would translate into higher value for 2012.
Shammo also called for revenue growth of 4% to 8% this year.
Much of that growth will come from customers in its own base upgrading their phones. He said that 67% of its wireless base could upgrade to a smartphone, bringing higher revenue. He added that 40% of its 4G LTE customers are new to Verizon Wireless.
"I don't subscribe to the theory that the pie remains static," said CEO Ivan Seidenberg, talking about the growth prospects of wireless.
On the wireline side, the executives talked up the opportunity that comes from improving the efficiency of the business, and of the growth of FiOS. Shammo said he expects continued wireline margin expansion.
McAdam, meanwhile, touted Verizon's strengthening relationship with Vodafone Group PLC (VOD), which alongside Verizon jointly owns Verizon Wireless. The companies are moving beyond a financial relationship and into a business one, working closer together on both the wireless and global business sides.
Seidenberg, addressing the company's appeal of the Federal Communications Commission's net neutrality rules, said that he doesn't see much of a near-term impact on business. But he added that it was important to challenge the FCC's move to expand its authority, saying there are more far-reaching consequences in the long term.
Verizon shares were recently up 69 cents, or 1.9% at $35.92.