Verizon Wireless, a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group Plc (VOD), plans to introduce a mobile video streaming application “Viewdini” later this month.
The demand for online mobile video streaming is rising rapidly. According to the recent study from the networking company Cisco Systems Inc. (CSCO), global mobile data traffic would grow eighteen folds by 2016. About two-thirds of the growth will stem from video streaming.
Hence, the company is looking for a new and superior technology solution to increase its capacity for providing streaming videos and speed up the data services. The Viewdini allows searching for a particular title, topic, artist or keyword from a variety of Web's leading content providers such as Netflix Inc. (NFLX), Hulu Plus, mSpot, broadcaster and movie-studio websites, Verizon’s FiOS, Comcast Corp.’s (CMCSA) Xfinity TV and other cable providers.
This new application will operate on Google Inc. (GOOG) Android devices with 4G LTE networks. It is free of cost and can easily be downloaded from Google Play store to a mobile. A new Android app will provide customers an easy access for finding video on their mobile phones.
The move would be beneficial to Verizon. As the cell phone markets are saturated and customers are hungrier for data rather than voice, the new development will boost the company’s future data revenues. Notably, Verizon will charge customers on a metered basis for its video services.
In addition, the new video app will motivate customers, who are otherwise disappointed with the recently announced smartphone upgrade plan that compels them to pay more either in the form of service fees or smartphone prices.
We are maintaining our long-term Neutral recommendation on Verizon. Currently, the stock retains the Zacks #3 (Hold) Rank for the short term (1–3 months).
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