Verizon Names Wireless Unit Exec as New COO

Early Monday, telecom giant Verizon Communications (VZ) named Lowell McAdam as president and COO, which would put him in line to eventually succeed longtime CEO Ivan Seidenberg. McAdam currently serves as the CEO of Verizon Wireless, a joint venture between the U.S. company and Vodafone. He will step into the new role Oct. 1.

Verizon is now the 13th largest company in America with 2009 sales of $108 billion, but Seidenberg and Lowell face a number of challenges to keep its revenue growing. The first is that its traditional wire-line business has shrunk and continues to do so as more homes turn to VoIP and cellular service.

Cellular expansion is also a challenge. The U.S. market is saturated. The four largest carriers -- Verizon Wireless, AT&T (T), Sprint-Nextel (S) , and T-Mobile -- have nearly 269 million customers. The fight for wireless revenue is now based more on market share than on a growing market. That competition is likely to put more pressure on prices as each company vies to take subscribers from its rivals.

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Carriers also face the challenge of choosing the right handsets in a world where the number of basic cellphones and smartphones grows by the month. For example, Verizon is expected to begin selling the iPhone early next year, finally ending Apple's (AAPL) exclusive arrangement with AT&T. Wireless carriers will be further challenged by the dawn of 4G super-fast networks and the extent to which people are willing to adopt them.

In addition, Verizon has to overcome the dominance of cable TV as the preferred product among consumers for home TV and broadband service. Cable is entrenched and has been for years. And, satellite TV has millions of residential customers. Verizon has spent $23 billion to build its fiber-to-the-home FiOS product. It has gained share, but those gains have been modest.

McAdam will have his work cut out for him now and when Seidenberg, 63, eventually leaves.
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