Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. All right, so Verizon kicking off
Speaker 1: the year in a big way. Um really saying or
Speaker 1: many I should say, saying, it disrupted the cable industry
Speaker 1: letting customers on bundle services. Jason, we talked about this
Speaker 1: all the time. The world is being turned upside down
Speaker 1: when it comes to content and distribution and bundling and unbundling.
Speaker 1: Verizon really at the center of it all. Well, that's
Speaker 1: exactly right, and I think it's fair to say that
Speaker 1: it's a brave new world, to say the least. And
Speaker 1: it raises the question to Hans Vestberg. He is the
Speaker 1: chairman and CEO of Verizon Communications here with us in
Speaker 1: New York. The question becomes, what is Verizon's place in
Speaker 1: this world that is as disrupted as we've probably ever
Speaker 1: seen it in terms of content and distribution. That's a
Speaker 1: good question. I think that we have been thinking through
Speaker 1: this authority lost one and a half year where we
Speaker 1: think we should fit them in the whole equal system.
Speaker 1: I think we came out with a very strong desire
Speaker 1: to have a network of serve risk. I mean to
Speaker 1: bonus variason is a network. I mean we're a network
Speaker 1: of people on network or physical wireless network and wireline networks,
Speaker 1: and and that's really what we're building. And we think
Speaker 1: in this era, in the next sort of generational technology transformation,
Speaker 1: we're going to find a really good spot in the
Speaker 1: network service. And I think that coming back to what
Speaker 1: you talked about when it comes to what we're doing
Speaker 1: on files, ultimately, what I want to do, I want
Speaker 1: to give optionality for our customers. I mean, we know
Speaker 1: all where this market is going and how our youngsters
Speaker 1: are consuming content. They we need to give them optionality
Speaker 1: to actually pick and choose what they want. And that's
Speaker 1: what the Mix and Match on fires just doing right now.
Speaker 1: And that's why I'm on the wireless side. I work
Speaker 1: with companies like Disney Plus et cetera to give that optionality.
Speaker 1: And I think we're in a new brave world where
Speaker 1: we as leaders just need to understand we need to
Speaker 1: see and listen to our customers daily unbundling. Why now
Speaker 1: is it us that you're seeing the numbers of people
Speaker 1: at certainly younger generation giving up linear TV and saying
Speaker 1: I want Netflack, Netflix, I want Apple TV, I want
Speaker 1: other things. How much of it was about that? It was,
Speaker 1: of course consumer insights, but it's also a fairly complex
Speaker 1: thing to do technology. Why it's what we're doing right now,
Speaker 1: meaning giving our customers the right to actually start choosing.
Speaker 1: And of course the whole system is is built on that.
Speaker 1: You take five hundred shanners and that's what you have.
Speaker 1: We we we want to give our customers. These are
Speaker 1: the shanners I'm looking at, and I think that anyone
Speaker 1: in the industry is seeing the same when you see
Speaker 1: all the big broadcasters come with their streaming services, etcetera.
Speaker 1: So I don't think it's something different. It's just that
Speaker 1: we decided this is our time. And remember our strategy
Speaker 1: has been all the time that we are not going
Speaker 1: into content. Others belong content, but we can park it
Speaker 1: with anyone. So in our case, this was very obvious
Speaker 1: way to do it. All right, So let's talk about
Speaker 1: this streaming services if we can for a minute, Because
Speaker 1: you've created some partnerships, notably with some of those big
Speaker 1: names that you mentioned. How do you create those? How
Speaker 1: do you pick and choose? Because from the content side,
Speaker 1: they while they're in the content business, all of them
Speaker 1: come at it slightly differently. Amazon's coming at it differently
Speaker 1: than Netflix, than Apple, than Disney, than a network. So
Speaker 1: how do you choose? How do you create the right business? Exactly?
Speaker 1: This is super important in the in the in the
Speaker 1: network the service as will have. Of course we're sat
Speaker 1: down and thought about what do our customers want to
Speaker 1: have and what what companies are resonating with our values
Speaker 1: and would really make something. Remember, we have the best network,
Speaker 1: whether I would say a fantastic brand, and we have
Speaker 1: a distribution and nobody else has when it comes to customers.
Speaker 1: That's what we come to the table. So I think
Speaker 1: that we can partner with anyone. I mean, if you
Speaker 1: looked at the last twelve months and were they made
Speaker 1: an exclusive with Apple Music. We didn't exclusive with Disney Plus,
Speaker 1: and we didn't exclusive with Amazon Web Services for our
Speaker 1: five G mobile edge compute. And of course that's all
Speaker 1: the queensandands, and it's queen not the coincident that we
Speaker 1: end up we wanted. Then we have crafted business models
Speaker 1: we actually win win for both of us. And it's
Speaker 1: obvious that Disney plas are gaining a lot of new subscribers,
Speaker 1: we are getting loyalty and we give more to our customers,
Speaker 1: so it has to be win win. It's not like
Speaker 1: they are used on top of us. It has to
Speaker 1: be an exchange of financials in between us. I think
Speaker 1: that Disney plus Apple Music and and Amazon are all
Speaker 1: happy with the setups, and we are happy well. So
Speaker 1: the top tier customers right get free access, whether it's UM,
Speaker 1: Apple Music or whether it's Disney. UM. What's the payoff
Speaker 1: for you? What are you seeing and are are there
Speaker 1: more partnerships coming? I think, first of all, the model
Speaker 1: we have is on the Disney plas and Apple Music.
Speaker 1: You get it free from the beginning, and then we
Speaker 1: turn them into paying customers. And of course that model
Speaker 1: is that we have a lower cost in the beginning,
Speaker 1: then we get something back when they get paid. And
Speaker 1: we now know how many of our customers will be
Speaker 1: turning around because we have so good understanding of our
Speaker 1: customer base who wants it. So that's that's how we
Speaker 1: do it. And of course yes it might be more,
Speaker 1: but I will do it exclusive. I will only do
Speaker 1: it with brands, and I really believe that he is
Speaker 1: sticking up to our values as well as for our customers.
Speaker 1: Are you seeing the payoff? Yet though I mean the
Speaker 1: music definitely, because that was a year agoes into launch
Speaker 1: these plus is is still in the infancy, even though
Speaker 1: we're extremely happy with it. And but you to talk
Speaker 1: about Disney about it because they are the one speaking
Speaker 1: about it. But we from Variation is also very happy.
Speaker 1: But but with that, with the Apple, you're seeing folks
Speaker 1: that get this free service, they become a longer term customer.
Speaker 1: So it makes sense. Yes, all right, it makes a
Speaker 1: local sense. So let's talk about that Amazon deal because
Speaker 1: on the back end that enables a lot of things
Speaker 1: that are increasingly important on the distribution side, and just
Speaker 1: on the technical side of the house. You're a technical
Speaker 1: guy at the end of the day, help us understand well,
Speaker 1: I mean that the titles you have said say it
Speaker 1: all in and of its own right, and I think
Speaker 1: it's notable. And we can talk about this a little
Speaker 1: bit later that there is a technical guy at the
Speaker 1: at the top of this company. But talk about the
Speaker 1: Amazon deal. We talk so much about the cloud and
Speaker 1: Amazon Web Services. What does that enable you to do?
Speaker 1: This is extremely exciting and I spent or we spent
Speaker 1: almost one and a half year with Amazon to do this.
Speaker 1: So just to understand what we're doing with Amazon. We're
Speaker 1: bringing the cloud service out to the edge together with
Speaker 1: five G in order to give super low latens the
Speaker 1: enormous TROOPUT for applications being developed by developers. This cannot
Speaker 1: be done. This is the first time in the world
Speaker 1: where actually we have seen that partnership. Amazon couldn't have
Speaker 1: done it by themselves because they don't have wireless five
Speaker 1: Verizon couldn't have done it by itself because we are
Speaker 1: not in clouds, we don't have cloud software. The combination
Speaker 1: of us can create something that is so transformative that
Speaker 1: today you basically as a developer, you can click on
Speaker 1: our first five YE edge side in Chicago and start
Speaker 1: developing an application for five G with low laties and
Speaker 1: enormous TROOPUT. Of course it's a transformative, and of course
Speaker 1: we're one side right now. Think of us have hundreds
Speaker 1: of them, maybe thousands of them over time where you
Speaker 1: have big data centers maybe less than ten in the country.
Speaker 1: We can then give fire the experiences of low laities
Speaker 1: and low LAATENC is basically you're picking up on the
Speaker 1: Internet and get the facts back autonomous course, real time,
Speaker 1: a r VR, artificial sort of intelligence. All of that
Speaker 1: can be at the edge, and we have just seen
Speaker 1: the start with it. So that's why we're so excited
Speaker 1: about this partnership and what we launched in December three
Speaker 1: of December. Yere so edge computing just for those who
Speaker 1: don't know, and I didn't know until I kind of
Speaker 1: a little bit of research, but it allows all those
Speaker 1: millions of connected devices to reach a data service much
Speaker 1: more quickly. That's why it's so important. It's also the
Speaker 1: potential for something like a fortunllion dollar market. Do you
Speaker 1: foresee this Han's being a significant part of your business
Speaker 1: going forward. Remember when we outline our five strategy, I
Speaker 1: said that this is the first time in the history
Speaker 1: where I actually have four different business cases on the
Speaker 1: same infrastructure which are built once. First of all, the
Speaker 1: court goes down with the new technology, which is important
Speaker 1: because data growth all the time. I can do five
Speaker 1: year home instead of doing five yet at home. I
Speaker 1: can do five yet at home. That's just an amazing
Speaker 1: opportunity for us. Secondly, five your mobility. You can go
Speaker 1: around with the five your phone and all of that,
Speaker 1: and then five your mobile age compute. So suddenly you
Speaker 1: have three four business case on the same infrastructure historically
Speaker 1: on three D and four YO was basically two at best.
Speaker 1: So yes, we see a great opportunity with this. And
Speaker 1: this is the just the first piece of a of
Speaker 1: an idea about five mobile edge compute. You're going to
Speaker 1: see much more from us coming the years to come,
Speaker 1: for sure. So let's talk about five G. We spend
Speaker 1: a huge amount of time talking about I feel like
Speaker 1: every day that everybody around the ecosystem there is a
Speaker 1: sense that the move from four G t five G
Speaker 1: is much different than from two G, two three G
Speaker 1: and even three G to four G. How much of
Speaker 1: the promise has been delivered so far and what's to
Speaker 1: come and what's the timeline. I think that we aren't
Speaker 1: remember when the design or five year was done. Um,
Speaker 1: the idea was, this is a wireless technology for industries
Speaker 1: and society. It was never thought it was of course
Speaker 1: thought that consumers will get the benefit. But from the
Speaker 1: beginning was how can you take away all the cables
Speaker 1: in the world and have the same performance as you advocate,
Speaker 1: but being much more agile, having new ways of doing it.
Speaker 1: That was the idea. So of course a lot of
Speaker 1: the things when I think about five D is that
Speaker 1: four G has basically two capabilities, speed and troople. The
Speaker 1: phone is better every time you get a new generation
Speaker 1: in five these eight currencies you can back their optimization,
Speaker 1: low latency. I mean just one of the currencies that
Speaker 1: today I can connect hundred thousand devices per square kilometer.
Speaker 1: Two more, I can do one million, and it's not
Speaker 1: never gonna be one million people on a square kilometer.
Speaker 1: So it's done for devices, talking to devices, optimizing flow
Speaker 1: for industries. So where do we're allway? I mean, the
Speaker 1: plan was actually to come out. We came out twenty eighteen.
Speaker 1: I think we're ahead of the game, but still from
Speaker 1: a consumer market where you just now starting to massively
Speaker 1: come into it. And as we have said this year,
Speaker 1: we're gonna launch twenty five D phones this year. So
Speaker 1: but then we was need to realize this market is
Speaker 1: probably and I'm not sure it's true, but I think
Speaker 1: Apples have the highest market share in this market. So
Speaker 1: it becomes important that Apple has a five D phone
Speaker 1: because people are very, very loyal to their operating system. Apparently,
Speaker 1: I'm not playing a new phone and that's five exactly,
Speaker 1: and I think that many you think if you're an
Speaker 1: Apple user. I think that Samson has come out with
Speaker 1: fantastic five D phones already, but it's a little bit
Speaker 1: how it works between operating systems. So we help me
Speaker 1: a little bit more, a little specific about the role.
Speaker 1: So how many cities this year? We haven't said that yet,
Speaker 1: but I promise you very soon we will tell you.
Speaker 1: I think that last year we said thirty, we made
Speaker 1: thirty one made fourteen NFL stadiums and four other arenas.
Speaker 1: We think that our five is so different from others
Speaker 1: because the performance on our millimeter way five is your extraordinary. Today,
Speaker 1: I get too big a bit per second in my phone.
Speaker 1: If you have a Ford your phone, which you probably
Speaker 1: have over there, you probably have forty to fifty megabits
Speaker 1: per second on variation, which is the best network in
Speaker 1: the country. And here we're getting too gig. You cannot
Speaker 1: even imagine how much faster that is. Do you need
Speaker 1: the more mid band airwaves to expand? What do you
Speaker 1: need today? I have all the assets I need to
Speaker 1: deploy a nationwide and a millimet wave network. Over time.
Speaker 1: Of course, we're always look into all the other spectrums
Speaker 1: we need in order to be more efficient. There's some
Speaker 1: options coming up. Yeah, there have been some announcement about it.
Speaker 1: I think that C Band we have said that that's
Speaker 1: an interesting spectrum because what it's most important with that
Speaker 1: is it's a global spectrum. Other countries are using that spectrum.
Speaker 1: Ultimately want roaming to work, so you take your phone
Speaker 1: wherever you are and the I your service will work.
Speaker 1: That is a spectrum that is going to be fairly
Speaker 1: global to see then, so that's why it's fairly interesting
Speaker 1: to be part of it. We have many international customers
Speaker 1: who have international business. Our customers want to have their
Speaker 1: phone on the go. You said at the top of
Speaker 1: the conversation Hunts that you're in the network business and
Speaker 1: describe that very well. You still do have some media
Speaker 1: properties though Yahoo, Her Post a o L. What's the
Speaker 1: strategy there, does that grow, does it expand organic acquisition?
Speaker 1: What happens there. It's a good question. I think that
Speaker 1: as as I came in and a new team came in,
Speaker 1: we started looking at the first decision we made that
Speaker 1: everyone works here, works with rights on and we need
Speaker 1: to find our commonalities. The first commonality we decided we
Speaker 1: have one brand value that's trust and innovation. Doesn't matter
Speaker 1: if my engineers is Digg Industries with Fibrine here in
Speaker 1: New York City or they work for huff incomposed, trust
Speaker 1: and innovation is what my customers need to get from us.
Speaker 1: So that was very important decision for us because that
Speaker 1: also caterd what we should do with the Rise and
Speaker 1: Media Group today. We have all our over the top solutions,
Speaker 1: you know, finance, sport, entertainment, etcetera. Actually making a lot
Speaker 1: of understanding for us where Compton come from. And secondly
Speaker 1: from my enterprise customer. With my advertising platform, right now,
Speaker 1: I can go to a customer and say that hey,
Speaker 1: I'm not the only can sell the connectivity in five G.
Speaker 1: I also had an advertising platform, So suddenly I have synities.
Speaker 1: From my sales point of view, I have technology synities
Speaker 1: because many of the Rise and Media groups and engineers
Speaker 1: is working with five G today. So suddenly I feel
Speaker 1: that this is really fitting into a strategy that we have.
Speaker 1: But we're happy with assets. Up to the third quarter,
Speaker 1: they had done a fantastic job from coming from double
Speaker 1: d D decline to very very small decline, so they're
Speaker 1: doing good job. You've been very consistent about kind of
Speaker 1: swearing off some of those big deals. Is that still
Speaker 1: the plate especially? Is that still the position that you're holding,
Speaker 1: especially as debt levels have come down, because at one
Speaker 1: point you're pretty interested. And I think one of the
Speaker 1: big TV companies, whether it was Charter or something else,
Speaker 1: was probably through before me then or the company. Yeah, yeah, no,
Speaker 1: I think that I and my team think that we
Speaker 1: have so much growth to be done in this technology
Speaker 1: change to fie D. We want to be focused on that.
Speaker 1: We think we can create value for our shareholders, em police,
Speaker 1: customer society on the focus we'll have on the network.
Speaker 1: So I have actually explicitly said that linear content companies,
Speaker 1: I'm not interested in that. Because there was so much
Speaker 1: hang on our shares. Everybody was asking are you going
Speaker 1: to buy that three letter acronym or that three letter acronym?
Speaker 1: I said, no, we're not going to buy that. And
Speaker 1: it's important for a company as well. When you formulated
Speaker 1: a new team, a new culture, and you go somewhere,
Speaker 1: it's very clear what you want to do and all.
Speaker 1: And that's why no, all right, so let's do a lot.
Speaker 1: So what would you buy? Because there are is there
Speaker 1: anything out there on the I think that what we
Speaker 1: are looking into and and we have we buy small companies,
Speaker 1: especially for the five year that can be part of
Speaker 1: our enterprise basins and things like that, but we haven't
Speaker 1: bought anything large lately. On right now, I'm more focused
Speaker 1: on the execution. I think that many of our competitors
Speaker 1: are thinking about a lot of other stuff. Me and
Speaker 1: my team, we can come in every Monday morning and
Speaker 1: start thinking about how do we execute even better this week?
Speaker 1: All right, So let's a little rapid fire to end
Speaker 1: up this interview a little bit about your management style
Speaker 1: and maybe how you view strategy going forward. The biggest
Speaker 1: existential threat to the company or the industry as the
Speaker 1: existential threat to the industry is hard as Sam and
Speaker 1: I think the technology is going to be more and
Speaker 1: more important for each and every person on this planet.
Speaker 1: So I don't think it's an exceptential threat to the
Speaker 1: English research. But if we don't think about customer and
Speaker 1: seeing that we get the customer optionality, that's an extension
Speaker 1: threat for any business. I would say, what competitor do
Speaker 1: you most admire? And why I respect all my competitors.
Speaker 1: I pick and choose for whatever I want to take
Speaker 1: from them. But the bonus, there's no one that I
Speaker 1: think that is that's what I want to be or something.
Speaker 1: But I respect them all. Is there somebody outside your industry, though,
Speaker 1: that you really respect and you think, man, they just
Speaker 1: they get their mission, they understand things or their company culture.
Speaker 1: So I think that there are many companies that have
Speaker 1: done a great job. And I think that where where
Speaker 1: I align most with other industry companies is the companies
Speaker 1: that actually have done as we are doing, including the
Speaker 1: society in part of our stractity and understanding the responsibility
Speaker 1: you have as a leader and as a company for
Speaker 1: doing right for employees, for society or customers and shareowners.
Speaker 1: Those companies, I think I have a lot of linement
Speaker 1: and and I do more business with those type of
Speaker 1: companies because we feel that we have responsibility. If my
Speaker 1: counterpart feel the same, we can do businesses together as
Speaker 1: well as doing right. What's the best advice you've ever given?
Speaker 1: In who gave it? You've ever been given? In who
Speaker 1: gave it to you? To me? Oh, I get so
Speaker 1: many advice to sellect one of them. I think that
Speaker 1: somewhere in the beginning, I think that I got advised
Speaker 1: to to really see that I I support and help
Speaker 1: people that are above me. Below me and on the
Speaker 1: side of me. I think that was important. I come
Speaker 1: from a competitive life. I was a sportsman, so basically
Speaker 1: I was extremely goal oriented, so people moved around me. Um.
Speaker 1: I learned quite quickly that I need to work with
Speaker 1: everyone and to be a good team leader. You are
Speaker 1: a sportsman and you have certainly your background has been
Speaker 1: in sports a lot. I mean you guys have as
Speaker 1: a company have expanded into that as well. So is
Speaker 1: that too a significant part of the mission mission going forward? Yes,
Speaker 1: I think that we think that the technology and the
Speaker 1: fire the has such a bearing on the new experience
Speaker 1: that I want to have in sports venues. We want
Speaker 1: to have the same experience in the sports venue that
Speaker 1: you have at home, and actually you can give some
Speaker 1: even better in state and experience. You can only get
Speaker 1: that in five D because the unlimited spectrum. I have
Speaker 1: the uplink that I have to thousand, hundred thousand people
Speaker 1: can send up the date. At the same time, virtual
Speaker 1: realities picked on cameras can only happen in five That's
Speaker 1: why we're into sports. That's why we're in the NFL,
Speaker 1: we're in the NBA. Were together with the baseball teams.
Speaker 1: We think that's important, all right, So I think I
Speaker 1: may hear the answer to this question. But if you
Speaker 1: did asking, well, if you didn't have this job, what
Speaker 1: job what you want? I have a feeling it might
Speaker 1: be something in the sports. Absolutely no. I would love
Speaker 1: used to be around sports, leading sports teams or a
Speaker 1: big movement in sports. And that's why I joined the
Speaker 1: Swedish Olympic Committee. I had one mission in life. I
Speaker 1: wasn't going to get the Winter Olympics six or Sweden.
Speaker 1: I have to quit a little bit earlier because I
Speaker 1: got another job which was apparently a little bit more important.
Speaker 1: But that would be what I do. And then of
Speaker 1: course working with you when I have spent half of
Speaker 1: my life already from the millionnim development goal, which is
Speaker 1: into the goal I mean the UN Foundation's board, to
Speaker 1: give back and see how technology can actually change the
Speaker 1: word in the next decade is so important to me.
Speaker 1: Inclusion for people, fairness, everybody can get education, health care
Speaker 1: from technology. The climate change, all of that technology are
Speaker 1: helped with. And you guys are obviously last question. You're
Speaker 1: all about five g no doubt about it, and so
Speaker 1: is a lot of the world. When do we really
Speaker 1: see it invading our world where everything I think this
Speaker 1: year is going to be an important year for that. Okay,
Speaker 1: this year a dress for I really appreciate you spending
Speaker 1: some time of this. Thank you, Thank you very much,