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Verizon boss: Yahoo! email hack 'is a big deal to us', we'll decide new price next month
Lowell McAdam talks acquisitions, 5G and IoT
Verizon is going to decide how much it is willing to pay for Yahoo! next month when an investigation into its massive security breach is completed.
Speaking at Intel Capital's Global Summit in San Diego on Monday, Verizon CEO Lowell McAdam said that the breach last month, which saw 500 million people's email accounts compromised, was "a big deal. A big deal to Yahoo! management and a big deal to us."
He said that experts pulled in by Yahoo! to dig into the forensics of the hack were "well into it," and the results were expected "in a few weeks." He added that Verizon's staff were also involved and were following the situation closely.
He dismissed the notion that Verizon could walk away from the deal however – something that the company's general counsel had publicly pondered earlier this month – saying that the acquisition of Yahoo! was "a part of our digital strategy."
He did lend weight to the suggestion that Verizon is going to ask for a significant discount on its agreed $4.8bn purchase, however. Once the investigation was over, "then we can make a determination" as to the purchase price, McAdam said, adding: "The impact on the overall deal will be decided in the next few weeks."
As for the other big acquisition news – AT&T's proposed $85bn purchase of Time Warner – McAdam was sanguine.
"I wasn't surprised at all," he said when asked about his first reaction to the news. "If anything, since Fox made an offer for Time Warner, I was surprised that it took this long."
He contrasted AT&T's "traditional media route" with Verizon's digital media approach and said that the acquisition made sense both for AT&T and for the broader market, dismissing criticism that the purchase could create companies with too much market power.
"The criticism leveled at the deal reminds me of 1998/9," McAdam said, "when we were starting to roll up wireless companies and people said companies would get too big, and have too much power. Well, that was completely backwards. I don't think we would have invested as much in 3G or 4G without that scale."
He did foresee some concern and opposition from content providers to the deal, but argued that unless there was some vertical integration, we wouldn't see the necessary "disruption and innovation" in the market.
The rest of the time, McAdam waxed lyrical about the advantages of the next generation of mobile phone technology – 5G.
The introduction of 5G opens up all sorts of new possibilities, he noted, telling one story about how, over a 5G connection, Verizon execs were able to drive a remote car around a track. "When we switched back to 4G, no one could get it around the first curve," he noted.
5G will provide much greater bandwidth and much lower latency – making it ideal for a new generation of devices from virtual reality to autonomous cars to smart city technology to drones – but due to it using a much higher frequency, data cannot travel as far.
McAdam thinks of 5G as "wireless fiber" and said that Verizon's big focus was on how to provide it to people without having to directly connect up their homes. "Half the cost of fiber to the home is inside those four walls," he noted. "So if we can come out 200 meters, we can save half the cost." Verizon is trialing 5G base stations from 200 feet to 2,000 meters away from homes.
He sees the technology as bringing "more disruption to the cable industry," and didn't rule out Verizon becoming a cable provider.
The other big advantage of 5G to the mobile industry, he said, is that it doesn't require pulling out old equipment. "When we moved from 3G to 4G, we had to replace all the hardware," he noted. "But 5G is an overlay." ®