Verizon Communications Inc at Goldman Sachs Communacopia & Technology Conference Transcript

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

Question: Jim Schneider - Goldman Sachs - Analyst : It's true. It doesn't feel so early. So maybe to start with the headlines, Hans, last week, you announced the acquisition of Frontier Communications for $20 billion. That's going to expand your fiber footprint to 30 million fiber passings by the time you plan to close the transaction in 2026. Very high level, give us a strategic rationale for the transaction. How does it fit into your overall strategy? And why this timing made sense for you today, given that you own some of these assets previously?

Question: Jim Schneider - Goldman Sachs - Analyst : No, it wasn't. Some investors I've spoken to are trying to figure out a few different aspects of the transaction. So maybe we could talk about a few of these in turns if we could. You've been quite bullish about the prospects for building and growing your fixed wireless footprint to much larger scale. How are you thinking about fixed wireless versus fiber as strategic priorities for Verizon? And why doesn't the increased emphasis on fiber? Would this deal mean there's some kind of pullback on the fixed wireless strategy?

Question: Jim Schneider - Goldman Sachs - Analyst : Very good. And then on the fiber strategy, maybe frame for us your long-term ambitions in fiber, just to frame it for the audience, cable has roughly 60 million or so passings. One of your competitors is talking about 40 to 45. And I guess, how big do you want to be and to me, it speaks --

Question: Jim Schneider - Goldman Sachs - Analyst : Very good. So maybe I want to shift focus a little bit and talk about, just for context, of course, this is the first presentation at a technology conference we're going to be hearing a lot about AI this week. And I think a lot of people --

Question: Jim Schneider - Goldman Sachs - Analyst : Exactly. I wouldn't immediately associate Verizon with AI, but I believe you have some initiatives in edge computing. You're doing some things in customer service and marketing automation as well, I believe. So give us a sense of the detail of what you're doing in those areas.

Question: Jim Schneider - Goldman Sachs - Analyst : And are you more excited about the revenue side of the cost side as an opportunity? And which one is the more --

Question: Jim Schneider - Goldman Sachs - Analyst : Maybe switching to a macro question for you. The state of the US consumer has been a big point of debate among investors lately, and you as Verizon touch --

Question: Jim Schneider - Goldman Sachs - Analyst : Talking about for a while maybe, you touch more consumers in your industry than any other -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2024 / 3:50PM, VZ.N - Verizon Communications Inc at Goldman Sachs Communacopia & Technology Conference

Question: Jim Schneider - Goldman Sachs - Analyst : Yes. And so I think people will be interested in your view. What are you seeing from the US consumer in terms of their propensity to still trade up and add more incremental services and other parts of the plan. Or are they seeing a propensity to trade down in certain cases? And I guess, are you seeing any of this drop in terms of credit delinquencies and the like?

Question: Jim Schneider - Goldman Sachs - Analyst : Yes. Maybe switching to the consumer wireless business and digging into that a little bit. I think one of the other topics that you've heard on investors' minds lately is the topic of Apple's upcoming iPhone announcement, which is a matter of hours, expected to have AI features embedded. So I guess, overall, what's your expectation around the success of this and other AI smartphones this year? And I guess relative to Verizon, how do you think about consumers, their switching activity and what means for your ability to kind of retain those customers and if you need to provide incentives or more subsidies to make that happen?

Question: Jim Schneider - Goldman Sachs - Analyst : Very good. Maybe thinking about the wireless market very broadly for a second. Subscriber additions in the market have continued to defy expectations for a big slowdown. I think we've got 4 million net adds in the first half of this year alone, industry-wide. And so what are you seeing right now in terms of the overall kind of health of the market, growth additions? And are you still seeing healthy market momentum heading into your end from what you compete today?

Question: Jim Schneider - Goldman Sachs - Analyst : And like you said, you have, over the last several quarters, been improving your execution in the core wireless business. You mentioned myPlan. Maybe talk about some of the other components of that improvement. And if I think over the next several quarters, what's your level of confidence in your sort of getting to the target you set out this year of Consumer net positive net additions in postpaid phones, excluding the second line? And do you have more confidence or less than you --

Question: Jim Schneider - Goldman Sachs - Analyst : Very good. And then relative to that, I think wireless pricing in the market has been something that's maybe surprised some people. I think it's been in a relatively healthy place over the last several quarters, you and your other competitors in the market have taken some amount of price in recent quarters. Maybe just talk about how do you think about this on a prospective basis. And specifically, the amount of value you're adding to consumers, and what are you monitoring to determine whether you can take a little bit more price or a little bit less price or if you've taken too much? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2024 / 3:50PM, VZ.N - Verizon Communications Inc at Goldman Sachs Communacopia & Technology Conference

Question: Jim Schneider - Goldman Sachs - Analyst : Now from a competitive standpoint, your cable competitors have continued to add wireless subscribers in the market, but they also have a wholesale relationship with you as a network provider. So how do you think of the cable companies as competitors and is also a customer relationship, do you expect them to be more aggressive than they have in the past? And how do you think about just sort of the overall kind of push and pull of that relationship?

Question: Jim Schneider - Goldman Sachs - Analyst : Maybe just returning to the topic of broadband for a second. You're coming back to fixed wireless, is what we talked about before, you said that you'll provide a market with an update once you get the 4 million to 5 million subscriber range, so I won't ask you about that. But just more broadly speaking, if you think about your investment priorities for fixed wireless over time, traditionally, fixed wireless has kind of been underneath the core mobile business as a priority, but is there a point in time at which you may consider doing investments in the network exclusively for fixed wireless or expressively for that purpose?

Question: Jim Schneider - Goldman Sachs - Analyst : Great. Maybe just two more, if I can. One on convert.

Question: Jim Schneider - Goldman Sachs - Analyst : I'd love to understand kind of your view on this because I think that everybody has a different view. We've seen what happened in Europe. I think you've previously clarified. You don't think that the US is going the way of Europe, but you've also said that you see better fiber -- excuse me, better wireless market share in the areas where you have Fios today. So maybe talk about kind of how you think this actually plays out in the US from a convergence standpoint and what synergies you see over the next 5, 10 years plus?

Question: Jim Schneider - Goldman Sachs - Analyst : Great. And maybe just to end on sort of a capital allocation, but also a policy question, which is around spectrum. You made a big bet on C-band some time ago, you mentioned over $50 billion investment. If you look -- right now, the FCC does not have spectrum auction authority. If you think about your needs as Verizon over the next 10 years or so, what do you see as kind of like when does this start to get problematic for you in terms of running out of spectrum, how do you think about your needs over time? And what changes in US government policy you are willing to see in this regard?

Question: Jim Schneider - Goldman Sachs - Analyst : Fantastic. Unfortunately, we're out of time, but thank you very much for being here, and thank you, Hans, for being here as we'll kick off our conference. We appreciate it.