Verizon Communications Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual) Transcript

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

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : So Kyle, I guess to start off, which job do you like better, running a whole company or running the network?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Good stuff. Can you maybe just describe what's in the Verizon business group and how it's organized? And if you can give any color around the primary products and services, how you think about them now?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And you're pretty unique in the industry and maybe even globally that well, you've really integrated wireless with wireline pretty aggressively in your unit. Wireless is almost half your revenue at this point, and your overall growth rate looks quite a bit better because of that. Can you maybe just talk about being so integrated with wireless and wireline? Do you have some unique products out there that you think or unique go to market that gives you a competitive advantage?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Yeah, I think you guys talked about the mobile device management in the last earnings call, and I definitely want to talk to you about that. So can you just elaborate on what that product is a little bit more and how unique is it? And how much of an opportunity do you think that is?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And so not to put words in your mouth, but so do you own the devices, and they pay you like $25 a month?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : So the products and services in the business market have been rapidly evolving our whole careers, to be honest, particularly what we started out selling. Where are we, do you think, in making the migration to more modern Internet or fiber Internet, cloud-like services? Because I think that's weighed on the industry's growth rate for quite a bit of timeyes?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And where are we in the decline of the legacy MPLS business? Do you think that's largely behind us, or we've got a few more years left?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : I mean, so if we take out that decline, do you think the industry is growing in line with inflation or is it still like under some pressure?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Yeah, it's not a question.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And why does AI have to be more distributed workloads?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And is this part of what you guys call mobile edge compute? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2024 / 4:25PM, VZ.N - Verizon Communications Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And you think AI is going to drive increasing network traffic? You know, volume growth?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : I personally think this is also going to drive demand for more IoT because people are going to want to measure more things and there's a lot more things I can do on an automated basis across the board. And you can't wire everything. And you guys have an amazing amount of spectrum with the millimeter and your whole spectrum portfolio. Will 5G stand-alone, will that improve? Do you think you're offering quite a bit and enable the new offerings? And how does that really tie into AI, do you think?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Yeah. And you guys can bundle it in very unique ways because of your convergence between the wireline and wireless networks.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : So there's an awful lot I want to talk to you about. Every time you answer a question, I get five more questions in my head. But just sticking on the AI and networking capacity for a moment. Lumen announced fairly large contracts and a few other potential contracts for dark fiber, I think, connecting up data centers for one of the hyperscalers. I think they're talking a total of $12 billion of dark fiber revenues. Are you guys doing much on the dark fiber side? And do you see much demand for interconnecting these large data centers?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And I didn't realize you still had much in the way of data center capacity. Are you talking about maybe repurposing some of your old central offices ?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And have you ever or have you guys repurposed a central office yet to allow to resell for data center capacity?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Yeah. I mean, it makes a lot of sense. I mean, why do you think you haven't done it so far? And I guess related to that, I know we were trying to rip out whole copper plant and a whole bunch of legacy switches. Have you done that in any markets, and would that be part of this process?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Cool. So just staying on the AI theme, can you talk about how you're using it yourself to cut down on expenses or do you have any new products that are AI-based?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Wow. And fixed wireless has been a real home run for you guys. And I just hear from, frankly, people that use your fixed wireless product and business market, they absolutely love it because it's just so much simpler to manage.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And it's consistent, right? You can do the whole country. If I got 50 locations, if I've just got one throat to choke and one set of CPE equipment to manage, I can go from having two network engineers to one in a lot of ways. And there is a question here, Kyle. Can you talk about, give us an update on how the strategy has evolved for your fixed wireless and how important it is?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And would you ever proactively, it's kind of related to this. I mean, if you just have a few copper connections left, I mean, would you go out there and say, look, we're going to move you over to wireless. We can give you an SLA, but we're shutting down the copper.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And are there other products that you're bundling in maybe that you hadn't bundled in previously like there's a whole range of security products now? And there's a whole range of new, frankly, voice products. Well, obviously, we touched on a whole range of new IoT products that are kind of coming up. But are you doing much on security or other products?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Any other areas of growth to think about?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And what's actually included in the managed services?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And would you also manage like WiFi access points so (multiple speakers) and all this like you manage the whole suite of enterprise networks?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And just out of curiosity, do you think WiFi 6E and 7 are a big deal? I mean, it seems like we're more than doubling the spectrum that's out there. Does it really matter at the end of the day?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : So when you're selling private network and they have dedicated spectrum, will you actually allocate the spectrum? Or are you using more stand-alone technology where you can kind of guarantee the throughput in the guarantee --

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : How do you think -- I've always thought there's an opportunity for business customers, in particular, where I would pay $20 a month more to know that I have like rights of -- I have quality of service, right, that I have guaranteed access maybe if the networks are congested. I know we do this in all sorts of different forms. But do you think there is a way with stand-alone or other technologies where you can start charging premiums for people that you can kind of give them better latency or throughput or if they need to download large files?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Well, frankly, I hadn't thought about that angle because I'm kind of like, every industry in the world, if you want to get a premium product, you pay a premium price.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : A fair point. So I do have a couple of questions from the audience here, and I'll go back because I have plenty more. One question here, will the data explosion and also the propagation properties of C-Band spectrum require a lot more network densification in the future? I know you're not running that unit anymore but that's the question.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : And I did want to touch on millimeter only -- I was by the port of Newark yesterday. I know we've seen the cranes kind of operating. And for one of the few times, I've actually seen them, they're sitting there all day, but I actually saw the containers kind of going up and down. It seems to me over time, that's something that's going to be replaced by AI. They'll automate a lot of those facilities, but you're going to need a massive amount of network capacity to do that. So I guess how important is millimeter and your strategy for these private wireless networks?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : You've done a phenomenal job on postpaid wireless phone ads. It seems like you're constantly gaining share really, really well. What's the secret sauce there?

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Well, we're out of time. I really appreciate the conversation. It's going to be an exciting couple of years. It really is. It's going to be some pretty major product upgrades. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 12, 2024 / 4:25PM, VZ.N - Verizon Communications Inc at Oppenheimer Technology, Internet & Communications Conference (Virtual)

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Well, and it's frankly as a former engineer, it's great having an engineer running the unit at this point in time in the evolution.

Question: Tim Horan - Oppenheimer & Co. Inc. - Analyst : Good luck. Thanks, Kyle.