Cellular cover phone verizon

As the new largest wireless operator in the U.S. - beating the combined SBC Communications/BellSouth by 8 million customers - Verizon has ambitious plans for the future. Those plans include varied data offerings and challenging AT&T Wireless for customers.

"Verizon has taken direct aim and is aiming for AT&T Digital One Rate customers," said Ken Hyers, industry analyst with Cahners In-Stat Group.

Verizon's nationwide bucket plan, which include 600 minutes, costs $15 less per month than AT&T Wireless' bucket plan.

"It's a significant opportunity for not only growing the base... but also stealing significant numbers of customers from competitors," said Ivan Seidenberg, chairman and CEO of Bell Atlantic.

The jury's out on how AT&T Wireless may respond. No one wants a price war, so many hope that AT&T Wireless won't immediately drop prices. Instead, the operator could add more minutes to its buckets or offer additional services, Hyers said.

AT&T Wireless also may accelerate its network buildout plans or acquire other companies to own a larger network, a Lehman Brothers report said. In addition, because Verizon's national calling plans require users to purchase an expensive tri-mode phone, the process of customers shifting onto lower-cost plans may be slow, the report said.

Verizon doesn't intend to stop now, though. It will actively pursue acquisitions to fill in the 10% of the country it doesn't yet cover. The operator also has earmarked $3 billion this year for network buildout, the introduction of new services and third generation network trials.

Other ambitious plans include a national prepaid service offering and Internet services based on the same platform that Vodafone AirTouch will use for international markets. Verizon also has an agreement with General Motors' OnStar for an in-vehicle, personal calling feature. OnStar estimates that about 4 million cars nationwide will be equipped with the capability within the next three years.

In addition to new services, Verizon's size alone can yield benefits. "We expect to realize significant operational synergies," said Denny Strigl, president and CEO of Verizon. Also, Verizon can benefit from purchasing economies of scale because of its relationship with Vodafone AirTouch. The new company has already signed an exclusive deal for tri-mode handsets from Audiovox.