Already a Bloomberg.com user?
Sign in with the same account.
Do you expect to have the problems AT&T (T) had with the iPhone? The argument is that its network was overwhelmed.
We've prepared greatly. We've observed everything that's gone on with what they've done. A little-known fact is that we carry almost as much data as they do. So even though we don't have the iPhone today, our Droid users are heavy data users....So we've had good success in carrying a lot of data up until this point. We think a key issue for us is going to be that customers, if they get a better experience on a smart device using our network, that's going to be a very important element of our marketing strategy. We think we're ready, and we're not going to talk much about it. We're just going to let the performance speak for itself.
How did this Apple tieup come into being? What changed?
I don't think anything changed. It all started with Apple (AAPL), and Apple decided that it wanted one carrier in every major market. So Apple and AT&T consummated a deal three years ago. And because Apple was more focused on a single technology—the GSM technology—they chose AT&T. We had good discussions with them, but it was clear to us that they weren't looking to make a device for both sets of technologies.
Did you think they made unreasonable demands at the time?
No. That was all part of the sort of mating dance they were going through. But most of that [was] used not against us, but used against the carriers they ended up signing with, all right? So no, I didn't think the terms were all that serious because we were never in the running. Now, over the course of the last three years, particularly if you go to Europe and some of the Asian countries, Apple expanded to a second carrier. And it was time for them to expand to a second carrier here. So yeah, we did have a lot of discussions with them over the last couple years. We even installed antennas on their campus, and they tried our technology. When they were ready to make a decision to add a second carrier, we made sure that they had a favorable impression.
But did Ivan initiate this by calling up Steve and saying, "Let's take another look at this"?
Yeah. Well, I did. I did call up Steve and go visit him. Lowell McAdam [Verizon Wireless president and COO] called up [Apple COO] Tim Cook and went to visit him. So it was not just a one-person thing. We consciously reached out to them more than once. This was the view that we had that...eventually their interests would align with ours.
What does this day say about you, and what does it say about Steve Jobs? That you never give up?
In terms of Steve Jobs, I think this is just another arrow in his quiver. He's done a great job at innovating, and he's got a product that people feel like they want to carry. And we did want to carry the iPhone. I would also make this point: We're further along in 4G than others are. So I think this decision, from Apple's standpoint, is also very strategic because they get to establish a relationship with us early in their cycles to take advantage of the 4G stuff that's going to come out over the next 12 months. If you do your job well, then in an industry like this, eventually the right partners are going to end up on the dance floor.
So now there is going to be a CDMA version of the iPhone. Where's the industry headed?
In the U.S., when the wireless industry was formed...everybody chose a slightly different technology because they thought it was going to work better. We chose CDMA, even though it wasn't the dominant technology—GSM was. We thought we could do more with the spectrum...than we could with GSM. And we did. For 15 years we did fine. We have a better network...higher customer satisfaction. But when you get to 4G, we were all able to get onto a common standard called LTE.
Would you have done this differently if you had it to do over?
We always believed that GSM had limitations in terms of its capabilities. And as it's turned out, while Europe got credit in the early days for being ahead of us, [it's] been late to the party with smartphones. While AT&T beat us, because Apple picked them on smartphones, they had trouble with their network. So our view is we've done pretty well. We have a great 3G network and the beginning of an evolution on 4G.
As a journalist—and a customer—you'll find this hilarious: 90 percent of the traffic on the Internet in five years will be video. We're sitting in a position to say that between our global Internet backbone, our FiOS [residential fiber-optic network], and now our nationwide wireless network, we're in a position to put all the video that anybody wants to put on any tablet, on any device, any television set...anything they want. So we can have a lot of fun in the short term banging heads with AT&T, but in the long term it's going to open up a new market and allow us to work with a great company like Apple to help us develop products.
Having presided over this, was it hard for you to have to make a deal with Apple in which your logo's not going to be on the phone?
No. I'm fine with that, simply because—I want to make sure I say this right, because I don't want it to come out wrong—we get a lot of customers on the Droid devices, so I think we've already proven that we're more than a one-device company. We're going to work our tail off to do a great job on the iPhone. But I think we're going to continue to do a great job on the BlackBerry and a great job on the Droid.
You're going to retire this year.
I'm going to retire, yes.
How are you going to deal with being on the cutting edge of technological change and just hand the keys to someone else?
I just got a letter in the mail that the pioneers of the Bell system will celebrate their 100th anniversary in 2011....I've worked here for 45 years. I've been CEO for 15. McAdam is a really, really good guy, and he's 56 years old. For me to stay...it's almost a little selfish.
Watch Charlie Rose on Bloomberg TV weeknights at 8 p.m. and 10 p.m.