WEBVTT - Verizon CEO Hans Vestberg Talks Verizon Topping Wall Street Estimates

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Let's talk about Verizon. A strong fourth quarter is powering

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<v Speaker 2>Verizon right now. Shares hired to the tune about nine

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<v Speaker 2>tenths of a percent. The company reported numbers this morning

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<v Speaker 2>that beat analyssessments. Also saw strong gains in new mobile

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<v Speaker 2>phone and broadband customers. Let's break it all down the

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<v Speaker 2>quarter that was and the future with Hans Bessberg. He

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<v Speaker 2>is Verizon chairman and CEO joining us now, Hans, great

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<v Speaker 2>to have you with us. Let's go to subscribers, because

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<v Speaker 2>you reported a net gain of five hundred and sixty

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<v Speaker 2>eight thousand monthly phone subscribers. The expectation had been for

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<v Speaker 2>below five hundred thousand. So from where you're sitting, where

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<v Speaker 2>do you think that those gains are coming from?

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<v Speaker 1>So I think, first of all, we have a great deal, Frank.

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<v Speaker 1>We had a very strong coarctor both financially and operationally.

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<v Speaker 1>We added actually one million new postped customer customers on

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<v Speaker 1>on broadband and why as together and as you right

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<v Speaker 1>for it said on the wireless side of five hundred

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<v Speaker 1>and sixty eight thousand, very strong quarter. We have great

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<v Speaker 1>offerings in the market. We have the best network that

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<v Speaker 1>is supporting that, and we have gradually improved now we're

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<v Speaker 1>five six quarter sequentially improvement both operational and financially, So

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<v Speaker 1>we not only had a great operational quarter, but they

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<v Speaker 1>also continue to expand our margins and our cash flow

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<v Speaker 1>for the full year was nineteen point eight billion dollars,

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<v Speaker 1>So very strong financials with the really solid growth on

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<v Speaker 1>customers as well. So I think the products resonate with

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<v Speaker 1>the market today more than ever. I mean, you cannot

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<v Speaker 1>work live play without mobility and broadband, and I think

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<v Speaker 1>we are meeting that as the largest carrier in the country.

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<v Speaker 3>You know, in addition to earnings, you also announced a

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<v Speaker 3>new AI initiative as well. And how do you feel

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<v Speaker 3>about the customers that you're bringing on when it comes

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<v Speaker 3>to AI connect, because is this something that you believe

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<v Speaker 3>will be a significant growth.

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<v Speaker 1>Yeah, definitely think about this. I mean, today the majority

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<v Speaker 1>of the NAI is large language models being developed in

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<v Speaker 1>enumerous large data centers. When that's going to be applications

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<v Speaker 1>for enterprises to use, they're going to go further out

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<v Speaker 1>in the network, both for the transport cost, for privacy, security, latency.

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<v Speaker 1>We have those assets were compute storage. We're cooling, we

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<v Speaker 1>have power. We already have that in our system that

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<v Speaker 1>we can host, and we already now have customers like

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<v Speaker 1>Google Meta that is using our network for their AI work,

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<v Speaker 1>you know. So this is just the start of it,

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<v Speaker 1>and the second phase is going to be way out

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<v Speaker 1>in the network and then Verizon, which have fiber across

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<v Speaker 1>the whole concrete, have also space and cooling and as

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<v Speaker 1>well as power. We have a lot of power that

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<v Speaker 1>we can resell as well. So all that is creating

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<v Speaker 1>a new business for us on existing assets that we

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<v Speaker 1>don't need to develop, they're already there. It's a great

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<v Speaker 1>opportunity with a big announcements of Yenai and data cents

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<v Speaker 1>in the country, and US is the leader here and

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<v Speaker 1>will be the winner on GENAI. I think we're a

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<v Speaker 1>great position to be part of that. Well.

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<v Speaker 2>Hans Corporates vand is the theme of the morning of course,

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<v Speaker 2>with that big announcement from Meadow. When it comes to

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<v Speaker 2>this opportunity that you see in Ai and you're ambition

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<v Speaker 2>to be the leader when it comes to gen Ai,

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<v Speaker 2>how much are you willing to devote of Capex to

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<v Speaker 2>that goal?

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<v Speaker 1>So, as I said, the majority of what we have

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<v Speaker 1>we already have done it, deployed one or one fiber strategy,

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<v Speaker 1>so we have fiber going around across the countrete, close

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<v Speaker 1>to data centers, close to all the enterprises. We already

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<v Speaker 1>have space, we have capacity or power that we can reuse.

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<v Speaker 1>So much what we have is already invested. So we

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<v Speaker 1>think about the second part of JNAI when the large

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<v Speaker 1>language models are already developed and you need to be

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<v Speaker 1>closer to the user, the company, the enterprise, or whatever

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<v Speaker 1>it might be, and there were well positioned. We already

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<v Speaker 1>have revenues from it today. We had in the fourth quarter.

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<v Speaker 1>Even though we're small, we're now ramping that up and

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<v Speaker 1>that's why we were announced today AI Connect, which is

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<v Speaker 1>our product and solution for this.

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<v Speaker 3>I'm also just curious about regular way Internet because if

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<v Speaker 3>you look at the Internet subscribers that you brought on

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<v Speaker 3>the rise or it was a decline from a year ago,

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<v Speaker 3>but it was more than what analysts expected, and so

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<v Speaker 3>what does that mean about the prospects of the people

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<v Speaker 3>you are bringing on and what it means for the

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<v Speaker 3>upcoming quarters.

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<v Speaker 1>So I think that our broadband strategy that we laid

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<v Speaker 1>out in the third quarter is really resonating with the market.

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<v Speaker 1>We have two great products, where the fiber products called files,

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<v Speaker 1>which is the I would say the highest quality fiber

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<v Speaker 1>product in the market. We have great success with that.

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<v Speaker 1>We added fifty thousand new customers in the quarker. Then

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<v Speaker 1>we have fixed wiles Access, which is a totally different

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<v Speaker 1>model where your self installed, you have great performance, high

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<v Speaker 1>customer satisfaction. We add the more than three hundred, three

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<v Speaker 1>hundred seventy thousand of those in the quarter. So all

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<v Speaker 1>that product is going into next year and or twenty five.

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<v Speaker 1>We're already next year to fortify that. And then we

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<v Speaker 1>have our pending acquisition or Frontier that is adding even

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<v Speaker 1>more fiber customers. So our broadband strategy is clear. We're

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<v Speaker 1>taking share at the moment, and we think we can

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<v Speaker 1>continue to do that into twenty five.

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<v Speaker 2>Let's talk about the share price a little bit, because

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<v Speaker 2>I'm taking a look over the past five years and

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<v Speaker 2>I see Forizon shares down about thirteen percent on a

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<v Speaker 2>total return basis. Hopefully we'll have that chart up and

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<v Speaker 2>I want to ask CONTs, I mean, what do you

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<v Speaker 2>think that investors are missing when it comes to your

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<v Speaker 2>story and why are we seeing this sort of sideways

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<v Speaker 2>chop when it comes to your shares.

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<v Speaker 1>I think if you look at share price, I mean

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<v Speaker 1>it's always a lot of different combinations. I think we

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<v Speaker 1>of course invested heavily in the five E and the Spectrum,

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<v Speaker 1>and or we took on a lot of debt during

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<v Speaker 1>the Spectrum acquisitions in twenty nineteen. Now we're working that down.

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<v Speaker 1>We're almost down to our death leverage of two point

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<v Speaker 1>twenty five on debt too beta, so we are actually

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<v Speaker 1>paying that down. So I think that our capital location

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<v Speaker 1>has been heavy to build a network and now getting

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<v Speaker 1>leverage on that, and that's what you see, and that's

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<v Speaker 1>I hope our shareholders will see that that growth factory

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<v Speaker 1>can continue and we get leverage on it. Secondly, we

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<v Speaker 1>are on the eighteenth year of increasing our dividend. I

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<v Speaker 1>mean there are not many companies are doing that and

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<v Speaker 1>are of course our yield is high today given that

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<v Speaker 1>the share price is a little bit subdue, but I

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<v Speaker 1>think that's what our shareholders should see and the prospect

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<v Speaker 1>of shareholders both that the dividend has been super stable

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<v Speaker 1>and growing and then now we're also continue to grow

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<v Speaker 1>both operationally and financially. So I have high ambitions here

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<v Speaker 1>and I hope that every stakeholder going to see that.

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<v Speaker 3>Certainly, the deat load was something investors were keeping an

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<v Speaker 3>eye on, and as you have made a lot of

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<v Speaker 3>progress in terms of reducing that load, I do still

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<v Speaker 3>wonder you had come off an announcement of a massive acquisition.

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<v Speaker 3>Do you see more potential acquisitions if you're able to

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<v Speaker 3>tap the capital markets or find it otherwise? Wondering what

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<v Speaker 3>your inclination here is to do more to expand your

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<v Speaker 3>reach to mergers and acquisitions.

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<v Speaker 1>So our strateted is pretty simple. We build one network

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<v Speaker 1>and we want as many profitable connections on top of

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<v Speaker 1>it any type of the segments of the market. Today,

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<v Speaker 1>we're are the number one on wireless. We have a

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<v Speaker 1>nationwide so we already have it, so now it's just

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<v Speaker 1>to continue to get leverage on on broadband. We just

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<v Speaker 1>acquired or in the process acquiring Frontier, we have a

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<v Speaker 1>great broad and offering. We're planning to address one hundred

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<v Speaker 1>million households with our broadband offering. So I think we're

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<v Speaker 1>sitting really good with assets we have, and that's what

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<v Speaker 1>I want to execute on. As a CEO, you can

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<v Speaker 1>never say you're never going to do an acquisition. But

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<v Speaker 1>clearly we have all the assets right now, and now

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<v Speaker 1>we are in execution mood, and see that we leverage that.

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<v Speaker 2>All right, Hans really appreciate your time. That is Hans'

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<v Speaker 2>best or of Horizon