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UPDATE 1-Verizon CFO sees wireless margins beyond 45 pct
May 19, 2009 / 2:02 PM / in 9 years

UPDATE 1-Verizon CFO sees wireless margins beyond 45 pct

*sees beating 43-45 pct wireless margin target

*sees continuing BlackBerry promotion

*does not plan unlimited prepaid offer

*Verizon shares flat at $29.70 on NYSE

NEW YORK, May 19 (Reuters) - Verizon Communications Inc (VZ.N) expects to beat its wireless quarterly profit margin target of 43 percent to 45 percent, the company’s Chief Financial Officer John Killian said on Tuesday.

Killian did not establish a new margin target for Verizon Wireless, its venture with Vodafone Group Plc (VOD.L), and said there may be quarters where the venture’s margins are within the target range due to unusual circumstances.

But he noted Verizon Wireless was able beat the target in the last few quarters even before the expected $1 billion in savings from its recent purchase of smaller wireless provider Alltel.

“I think there’s opportunity, as we’ve shown, to drive past that,” the executive said.

Killian said Verizon Wireless would not compete in the market for prepaid plans with unlimited calls for a set fee. Much of the wireless industry’s growth comes from prepaid services, where customers pay for calls in advance,

“We do not believe its the right strategy for us to go out with any unlimited plan,” Killian said.

As consumers are looking to cut costs in the weak economy smaller rivals such as Leap Wireless LEAP.O, MetroPCS Communications PCS.N and Boost, a unit of Sprint Nextel Corp (S.N), have had success from such plans.

Killian said Verizon Wireless would continue with its first-quarter promotion offer of two BlackBerry phones from Research In Motion RIM.TO for the price of one. (Reporting by Sinead Carew; Editing by Derek Caney)

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