Verizon Communications Inc at Deutsche Bank Media, Internet and Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Maybe we could start off with the competitive landscape. What are you seeing in the market in terms of industry switching activity, retail store traffic, promotion levels, that sort of thing.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. All right. Do you think that there's any softness from an industry standpoint? Is it too early to tell that? Or is it purely competition that's maybe -- environment?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. All right. Helpful. What is yours and Sampath's focus this year to build on the successful improvements that you've made over the last 18 months to improve postpaid volumes? Is it gross adds? Is it churn? Is it both? Where do you see the opportunity to drive improvement? And how do you go about doing that?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. And you're entering this period of increasing promo roll-offs. What are the steps that are ensuring to take -- excuse me, what are the steps you're taking to ensure high retention in those subscribers? And will this put some upward pressure on churn as these rollouts occur?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. Understood. Sampath had indicated on your fourth quarter earnings call that he expects 8 million to 8.5 million industry postpaid phone net adds this year across both Business and Consumer. What's the confidence level in that estimate? And can you just talk about how you arrived upon it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 12:00PM, VZ.N - Verizon Communications Inc at Deutsche Bank Media, Internet and Telecom Conference

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. What are you seeing specifically from the cable operators as far as competitive intensity? And what are your expectations for Comcast's new offer strategy that they've said is coming?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. Do you think there's a maybe a natural level at which cable net adds to decelerate? And if so, do you think we're anywhere near that at this point?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. Helpful. Shifting gears a little bit. The new administration's policy toward immigration has raised questions over the impact on industry subscriber -- on the subscriber pool. How do you expect your postpaid and prepaid businesses to be affected with few immigrants entering the US via the Southern border and also thereby potentially increased deportations. Where would this show up in your business, if any?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. That's interesting, yes. So when President Biden's executive order went into place, I think it was in June, you didn't really see any impact in the back half of the year?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. All right. Over the past few years, we've seen historically low levels of upgrades for Verizon. That trend seems to have bottomed in '24. You mentioned you expect upgrades to be up mid-single digit. I guess you addressed it to some degree, but can you just explain the mid-single-digit increase and put it into context? And I guess, maybe address why it might potentially not be higher than that?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Right. So that's interesting. So obviously, longer contract periods have led to lower upgrade rates. But it sounds like the biggest factor is actually better batteries, longer battery life.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : All right. Interesting. What are the various ways our pace of upgrades will impact the business? And how do you plan for that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 12:00PM, VZ.N - Verizon Communications Inc at Deutsche Bank Media, Internet and Telecom Conference

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. Talk about the ARPA outlook a bit. Verizon recently put in place two price-ups. How are those received by the base and the opportunity that you think you still have to take pricing in the future?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : So a lot of people buy the cloud storage, I mean, I think a lot of people on Apple use iCloud. Just curious as to -- is it more the Android base that's buying it? Or do Apple customers do it as well?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Interesting. So more than half the base is on myPlan. And as you mentioned, it allows you to sell perks. How would you characterize the success of perks overall? What are some of the measurable ways it's affected business performance? And how important is this going forward to the execution of the strategy?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Yes. Let's move to convergence a little bit. So the convergence of home broadband and mobile has obviously been a major point of discussion in the industry. How do you expect convergence to evolve in the US? And just given your experience, how would you compare and contrast that outlook to the path that convergence took in Europe?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : I'm going to scooch back a little, because I'm being blinded by the sun. Forgive me.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : So it's the downside of the view, I guess. So Verizon has a robust fixed wireless effort and Fios footprint, the latter of which you're planning to grow to 30 million premises. That's up from 18 million today. How do you utilize these two access technologies in a complementary way to optimize that home broadband and convergence opportunity?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : When did you get to that strategy of marketing that way, by the way?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : How are you making decisions regarding where to build fiber to the premises? What led to the decision to begin accelerating fiber build in your current footprint? And having fixed wireless in the portfolio impact that decision-making process on where it builds.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : And on fixed wireless, management has guided to a bit slower pace in fixed wireless net adds during the first half of the year. Just wanted to understand what's driving that slowdown and then the expected subsequent reacceleration in the second half of the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 12:00PM, VZ.N - Verizon Communications Inc at Deutsche Bank Media, Internet and Telecom Conference

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Can you share some other details around the fixed wireless effort? For example, how many homes are open for sale? Where that number is headed? Maybe talk about where you're winning in the market? What types of customers are taking fixed wireless? The high-quality subs, what kind of credit scores do they have? Just any kind of details around that. How much are coming from cable? Just to help us kind of understand a little better.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : One thing I was curious about is how does the product perform where it competes with fiber to the home? What do you see from a take rate and penetration perspective there share perspective?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. How about other competitors, fixed wireless efforts? How have those impacted the space? Have you lost any subs to fixed wireless from other carriers? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 12:00PM, VZ.N - Verizon Communications Inc at Deutsche Bank Media, Internet and Telecom Conference

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. Shift gears a little bit to the direct-to-device segment, which I think your CEO called out in his blog as one of the key technology trends to watch this year. And there's obviously been a lot in the market about it. But you've established a relationship with AST SpaceMobile for direct-to device. How important do you think it is to be able to offer satellite broadband and voice to your customers? Any sense for how much of the base would value this, would be willing to pay for it? And any kind of thoughts on how you might think about pricing, the pricing construct for it?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. All right. Staying on the topic. So T-Mobile did something interesting when they launched the data for Starlink by inviting Verizon and AT&T customers to join data. Just wondering how you think about the potential churn threat there as they go to commercial launch, because Verizon and AT&T customers will then be charged $20 for that if they want to keep that service? And secondly, customers presumably provide their contact information on T-Mobile when they sign up, so it allows T-Mobile to target them with direct offers. So just wondering how you're thinking about that competitor threat? And are you able to tell how many Verizon customers opted into the beta so far?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Yes. Have you seen many people using the Globalstar option on Apple phones in your base? I mean it doesn't seem like it's ever really been marketed, but it's available. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 12:00PM, VZ.N - Verizon Communications Inc at Deutsche Bank Media, Internet and Telecom Conference

Question: Bryan Kraft - Deutsche Bank AG - Analyst : And that's text only. Do you see the demand though being fundamentally different when you move to a broadband and voice solution?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. You're expecting prepaid to return to positive revenue growth in 2025. Can you talk about that journey you've been on a prepaid over the past few years, including the TracFone acquisition? Steps you've taken to turn the business around? And what's the algorithm behind that turnaround, so to speak?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. Great. And last question I wanted to ask you relates to AI. How significant do you think artificial intelligence will be in telecom services? What are the ways you'll leverage it in consumer to drive a better customer experience and enhance your sales processes, while at the same time increasing operating efficiency? It seems like telecom is one of kind of the big industries that can stand to benefit from AI.

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Mass personalization seems to be one of the -- .

Question: Bryan Kraft - Deutsche Bank AG - Analyst : Okay. All right. We'll wrap it up there. We're out of time. Thanks, Frank. Appreciate it. Thanks everyone.