Verizon(US:VZ)2023-09-07 07:34Verizon Communications Inc. Conference Call Summary Company Overview - Company: Verizon Communications Inc. (NYSE: VZ) - Event: Goldman Sachs Communacopia & Technology Conference 2023 - Date: September 7, 2023 Key Points Capital Allocation Strategy - Verizon has a clear capital allocation strategy focusing on three main areas: investing in the business, increasing dividends, and paying down debt. Once debt is managed, the company plans to initiate share buybacks [1][2][40]. Dividend Increase - Verizon announced a 2% increase in its dividend, marking the 17th consecutive year of dividend growth, reflecting strong cash generation and board support [2][40]. Consumer Segment Improvements - Significant operational improvements have been observed in the Consumer segment due to leadership changes and a regional operating structure. The introduction of the "myPlan" initiative allows customers to customize their plans, enhancing customer satisfaction and engagement [3][4][6]. Wireless Business Performance - The wireless business has shown consistent improvement over the past three quarters, with the Business segment adding approximately 100,000 to 150,000 new wireless customers each quarter. The Consumer division is also expected to show sequential improvement [5][6][10]. Average Revenue Per User (ARPU) and Average Revenue Per Account (ARPA) - Verizon has successfully implemented price increases to offset inflationary pressures, leading to significant growth in ARPA over the past 24 months. The company aims to continue this trend by simplifying plans and enhancing customer offerings [7][8][9]. Competitive Landscape - Verizon maintains confidence in its competitive position despite challenges from cable operators and other competitors. The company emphasizes its ownership of network infrastructure, which provides economic advantages and supports its pricing strategy [14][20]. Fixed Wireless Access Growth - Verizon is adding approximately 400,000 broadband subscribers per quarter, primarily through fixed wireless access. The company sees potential for further growth as it expands its C-band spectrum into suburban and rural areas [21][24][30]. Convergence Strategy - Verizon views convergence as a strategy to enhance customer convenience rather than merely a pricing tactic. The company aims to bundle fixed and mobile services to improve customer loyalty and reduce churn [25][26]. Capital Expenditure Outlook - Verizon expects capital expenditures to decrease as it moves past the C-band deployment phase, projecting a return to a more efficient capital intensity model. The company aims for a capital expenditure range of $17 to $17.5 billion, which is considered low for the telecom industry [35][36]. Future Capital Allocation - Once Verizon meets its deleveraging targets, it plans to consider share buybacks as part of its capital allocation strategy, alongside maintaining a focus on network investment and customer service [39][41]. Direct-to-Consumer Opportunities - Verizon is leveraging its position as a major direct-to-consumer channel through initiatives like the +play marketplace, which allows customers to manage subscriptions and offers potential revenue generation through partnerships [31][32]. CFO Transition - There is ongoing speculation regarding the future of the CFO role, but current leadership expresses confidence in the existing CFO's performance and plans for continuity [42][43]. Additional Insights - The company is optimistic about the long-term growth of mobility, broadband, and cloud services, viewing them as essential infrastructure for society [10]. - Verizon's strategy includes a focus on enhancing customer experience and operational efficiency, which is expected to drive future growth and profitability [20][36].