July 27 (Bloomberg) -- Verizon Communications Inc. may start packaging mobile-phone service with its FiOS television and Web service to spur sales as wireless subscriber growth slows industrywide.

“More and more customers are asking for that,” Verizon Wireless Chief Executive Officer Lowell McAdam said in an interview last week. “A year from now, we’d be describing a very different set of applications and use cases for the phone and bundling and buying buckets of minutes for different devices.” He declined to say when that might happen.

Discounting the services may help Verizon lure customers away from rivals such as cable operator Comcast Corp., which offers its own packages. Verizon, which is spending more than $20 billion on the fiber-optic network, said today that FiOS TV subscribers almost doubled in the second quarter from a year ago, compared with a 28 percent increase in wireless clients.

Verizon added 1.1 million net new mobile customers last quarter, a 24 percent drop from a year earlier. The pool of new U.S. mobile subscribers has shrunk because there are now about nine mobile devices in circulation for every 10 people in the U.S., according to the CTIA wireless industry association.

Combining the services would give Verizon an advantage over cable rivals, which typically don’t offer that type of package, said Charles Smith, chief investment officer of Fort Pitt Capital Group Inc. of Pittsburgh. While the carrier may initially sacrifice revenue by offering discounts, its capital costs will decline faster as the FiOS network buildout progresses, he said.

Churn Rates

“It’s going to have an effect on the churn of companies that don’t get there first,” said Smith, referring to the industry term for customer turnover. “That’s going to be the key.” Fort Pitt has $800 million under management, including 640,000 shares of Verizon.

Verizon Communications owns 55 percent of Verizon Wireless, while Vodafone Group Plc owns the rest. Verizon Communications said today that sales rose 11 percent to $26.9 billion last quarter, boosted by the purchase of Alltel Corp. this year. Excluding Alltel, sales growth would have been 1.9 percent.

Profit declined 21 percent to $1.48 billion, hurt by pension expenses and costs from Alltel, which helped Verizon Wireless surpass AT&T Inc. as the largest mobile-phone company in the U.S.

New York-based Verizon Communications dropped 50 cents, or 1.6 percent, to $31 by 4 p.m. in New York Stock Exchange composite trading. The stock has lost 8.6 percent this year.

New Promotions

Verizon also said today that it’s offering broadband customers free access to Wi-Fi, stationary “hot spots” that give customers Web access at a fixed location, such as a coffee shop.

McAdam, 55, said he expects the industry to move toward more all-encompassing data plans, where customers buy a single plan for everything from phones to laptops to digital book readers.

Verizon also is upgrading wireless networks to so-called long-term evolution technology to power handsets that can surf the Web at high speeds, known as smart phones. Verizon Wireless will start selling the LTE service by the middle of next year, and smart phones that run on it may be available by the second half of 2010, McAdam said.

Rival AT&T has spurred subscriber growth with its smart- phone brands, serving as the exclusive U.S. carrier for Apple Inc.’s iPhone. Dallas-based AT&T debuted the latest version of the phone last month, selling more than 1 million devices in the first three days of their debut.

“There’s a very good possibility” Verizon will offer an LTE device with Apple, McAdam said. He declined to comment on whether the companies may collaborate before that. The carrier also expects to begin selling Palm Inc.’s Pre device next year.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

Last Updated: July 27, 2009 16:09 EDT