Verizon 3Q15 Earnings Call Notes

Churn at 0.93%

“Postpaid net adds totaled 1.3 million, which does not include any wholesale or Internet of things connections. Net phone add additions were 430,000. Customer retention was also a highlight with postpaid churn of 0.93%, down 7 basis points from last year”

Launched go90tm

“In terms of our mobile video strategy earlier this month we were the first to market with the commercial launch of go90tm, a differentiated, mobile-first social entertainment platform. Go90 includes a broad selection of premium content and social engagement features, and the capability for sharing and conversation around the content. The initial feedback has been strong with increasing engagement without significant promotion, and we have received positive industry recognition.”

Seeing a decline in triple play customers, more interest in custom TV

“While FiOS broadband continues to grow, we are seeing a decline in the percentage of triple play customers. In addition, we continue to see interest in our custom TV offering, which offers more choice and control at a lower price point. We expect the continued adoption of custom TV will pressure revenue growth, but result in a higher contribution margin.”

FCC should not play favorites after seeing the abuse by Dish in the last auction

“after we saw the abuse in the AWS-3 Auction by Dish, I think the FCC should learn from this and not give preferences to large corporations, award credits or set aside and the government shouldn’t be in the business of picking winners and losers. ”

Go90 is a very different product set from linear TV

“As far as go90, look, go90 is a very different product set. It’s mobile first, a social entertainment platform. Let me just talk a little bit about where we are here. But this really is just a totally different perspective than linear TV and content deals. And we know how to do that and we’ve been doing that for 10 years with files. But this is a very different platform. Keep in mind we are 20 days into this. We actually haven’t done any advertising or promotion activity around this product”

Custom TV will pressure FIOS top line

“And of course, as we said, this is going to put a little bit of topline pressure on FiOS growth. And the reason for that is the way I have to think about this is the new bundle is about $20 less than the average normal FiOS bundle.”

We are anticipating a little less volume than last year in handsets

“on the handset piece for upgrades. What I would say is we are anticipating a little less volume than last year because of the total iconic launch of the iPhone 6 and 6 Plus. But this quarter we are still anticipating a fairly heavy volume quarter as every fourth quarter is, but I would anticipate a little less than what we saw last year.”

We’re now 100% edge at the point of sale except for customers who are on the subsidized model

“We are now 100% at the point of sale with Edge only. Of course, we have an exemption for current customers who are on the subsidy model who can opt to take a new subsidized handset. So, I’ll have to see how that works going into 2016 and that may keep us around that 70% to 75% take rate but it’s too early to tell.”

Not interested in rental phones, not seeing any impact from competitors

“As I’ve said before, I am not interested in a rental program. We are not seeing any impact from those programs from the competitors in our base and I think our results speak to that this quarter and I think they’ll speak to that in the fourth quarter as well.”

Rating agencies are becoming concerned with balance sheet risk of putting phones on balance sheet with questionable residual value

“I think what you’ll see is if you speak to the rating agencies, they are becoming very concerned with the balance sheet risk of some of the industry on putting up rental phones on the balance sheet with what the residual value will be with those rental phones.”

Even though everyone thinks the industry is slowing, we continue to have net adds

“even though everyone thinks that the industry is slowing we continue to have net adds overall. Tablets become a bigger piece, data continues to grow. So, the industry overall although very competitive, continues to grow despite all that.”

Our focus has always been on network quality

“Our focus has always been competing on a network quality, reliability and simplicity. And that’s how we have been winning for the past 18 years and that’s our focus going forward.”

We’re going a different direction than the rest of the industry

“As far as how the industry changes, I think what you are seeing from us is we’re going in a different direction with our go90 launch.”

WiFi is not going to replace LTE

“we truly believe that Wi-Fi is a complementary wireless network if you will with LTE and we don’t believe one replaces the other. ”

LTE is a fully managed network, different from WiFi

“And again, another differentiator between LTE and Wi-Fi, is LTE is a fully managed network, Wi-Fi is not. So, when you start to load up Wi-Fi, that’s why you start to see real degradation in service, whereas, with LTE and then overlaying unlicensed LTE. We can dynamically increase capacity when we see that that capacity needing increase.”

We’ve always said that Charlie is sitting on very good spectrum

“We’ve said that all along that Charlie is sitting on very good spectrum. It’s very good for capacity, which is why we spent $10.4 billion in the auction. But we also can do things what we’ve done in Chicago and New York, where we felt the license cost was way too high and we instead decided to deploy small cells and get capacity in a more reasonable cheaper way, if you will.”