Verizon Communications Inc. (VZ) Goldman Sachs Communacopia + Technology Conference (Transcript)

Summary of Verizon Communications Inc. Conference Call Company Overview - Company: Verizon Communications Inc. (NYSE: VZ) - Event: Goldman Sachs Communacopia + Technology Conference - Date: September 9, 2024 - Participants: - Hans Vestberg - CEO and Chairman - Jim Schneider - Goldman Sachs Telecom Analyst Key Points Acquisition of Frontier Communications - Verizon announced the acquisition of Frontier Communications for $20 billion to expand its fiber footprint to 30 million fiber passings by 2026 [4][5] - The acquisition aligns with Verizon's strategy to increase its Total Addressable Market (TAM) and sustain growth [6][7] - Frontier currently generates over 55% of its revenue from fiber, indicating a successful transition from copper to fiber [7] - The acquisition is expected to be accretive to revenue growth and EBITDA from day one, with EPS and cash flow benefits anticipated within a year [8] Fixed Wireless vs. Fiber Strategy - Verizon maintains a dual strategy focusing on both fixed wireless and fiber, emphasizing customer optionality [11][13] - Fixed wireless access has a high Net Promoter Score (NPS) and is seen as a competitive product [12] - Verizon aims to reach 4 to 5 million fixed wireless access customers and will provide updates on its broadband strategy thereafter [14] AI and Edge Computing Initiatives - Verizon has been investing in AI for over 10-15 years, focusing on efficiency, personalization, and revenue generation [19] - AI applications have improved customer service efficiency, reducing call handling time and enhancing sales through better data utilization [20][21] - Verizon is well-positioned in Mobile Edge Compute, with partnerships with Google, Amazon, and Microsoft, anticipating growth in GenAI applications at the edge [22][23] Consumer Market Insights - The necessity for broadband and wireless connectivity has increased, with Verizon's consumer base showing high quality and FICO scores [28] - There has been no significant increase in bad debt or delinquency rates, and Verizon expects to reach 50% of its consumer base on its premium offering, myPlan, within a year and a half [29] Wireless Market Dynamics - The wireless market is experiencing a third phase, with a shift in customer acquisition patterns and a focus on service revenue growth [36][37] - Verizon has implemented a more segmented approach to promotions, ensuring financial discipline while enhancing customer value [33][34] Competitive Landscape - Verizon views cable companies as both competitors and wholesale partners, maintaining a healthy relationship while competing in the wireless market [48][49] - The company has been financially disciplined in pricing strategies, focusing on value enhancement for customers [45][46] Future Outlook and Spectrum Needs - Verizon has a strong spectrum position with 1,600 MHz on millimeter wave and 161 MHz mid-band, but emphasizes the need for ongoing spectrum availability to maintain competitiveness [63][64] - The company urges the government to facilitate spectrum auctions to avoid future disadvantages in the telecom sector [64] Conclusion - Verizon is strategically positioned for growth through its acquisition of Frontier, dual focus on fixed wireless and fiber, and ongoing investments in AI and edge computing. The company remains committed to financial discipline and enhancing customer value while navigating a competitive landscape.