Verizon at JP Morgan Conference Notes

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Lowell McAdam – Chairman and Chief Executive Officer

You have to be the best at the connectivity layer

“As I look across my career, you can’t be good at the upper stack things if you aren’t the best at the connectivity layer. And I think we’ve shown with our FiOS platform and with our wireless platform and we have a campaign, ad campaign running now Better Matters to customers whether you look at your ability to have pricing power, whether you look at your loyalty numbers which are very strong for us and have always been very strong. Being that leading edge of technology opens up a lot of doors and helps to take care of customers, so that’s why we feel as strongly as we do.”

5G will enable high speeds into the house without a wire

“If you look at 5G in a fixed wireless environment, we’ve demonstrated for some of our shareholders in our Basking Ridge facility putting 1.8 gigs into the house without a wire. And if you think about that from a customer’s perspective if I can do that then the virtual reality all the other things 3D video conferencing, the whole nine yards. We all grew up watching in Star Wars actually might happen. So I think that’s what the consumer is going to see.”

I think go90 got overhyped

“I think we had always internally Phil viewed go90 as what we call patient money inside the business that we knew – because it wasn’t our core competency, we knew we’re going to have to build slowly in this area and the way I would characterize that we have seen enough success to make us excited about continuing to work it, but we didn’t believe and I think it did get a little bit overhyped and I’m sure we contributed to that to a certain extent. But we didn’t believe that it was going to move the needle on a $130 billion revenue stream overnight.”

We used to talk about IoT being a revenue driver in the late 80s

“So look we’ve been talking about IoT, I think we talked about this a little bit at dinner last night, back in the late 80s when I started to get involved in cellular we used to talk about IoT being a huge revenue driver. I finally think we’re on the cusp of that, but on the meantime the industry is exploded.”

The leap from 3G to 4G was a bigger leap of faith than 4G to 5G

“I think the leap from 3G to 4G was a bit more of a leap of faith than the leap from 4G to 5G. If you look at the pent-up demand around IoT at around video and around virtual reality and I don’t disagree with Mark Zuckerberg that virtual reality maybe five years or 10 years out before it becomes big, but think about if it becomes big what does that mean for industrial use, for enterprise use, for entertainment use. And when you can deliver this early in the process when you can deliver two gigs into a home with beamforming antennas – so there is another big surge coming.”

We have a 2 year lead on competitors

“There is no doubt in my mind and the competitors – look those of you that have been around since 1999 every one of those competitors has been two years away from catching Verizon. If we stood still, yes it might happen. Guess what we don’t stand still. So we’re going to lead on 5G and we will probably lead on 6G whatever that comes, but in the meantime there’s a lot of opportunity out there.”

Our customer base wants to maintain the subsidy, we’re not going to push them out

“our adoption rate of device installment has been in the high 60’s whereas others have been in the more in the mid-70’s and you know each percentage point is meaningful. But that’s what our customer base wants. They want to maintain the subsidy and so I’m not going to force them out of that. That transition does lower your revenue per subscriber and then it flattens out over time and then it rises back up again. We’ve watched the other carriers and what their curve looks like and we think we’re in that the trough of that curve now and beginning to move back up”