Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Let's talk about Verizon. A strong fourth quarter is powering
Speaker 2: Verizon right now. Shares hired to the tune about nine
Speaker 2: tenths of a percent. The company reported numbers this morning
Speaker 2: that beat analyssessments. Also saw strong gains in new mobile
Speaker 2: phone and broadband customers. Let's break it all down the
Speaker 2: quarter that was and the future with Hans Bessberg. He
Speaker 2: is Verizon chairman and CEO joining us now, Hans, great
Speaker 2: to have you with us. Let's go to subscribers, because
Speaker 2: you reported a net gain of five hundred and sixty
Speaker 2: eight thousand monthly phone subscribers. The expectation had been for
Speaker 2: below five hundred thousand. So from where you're sitting, where
Speaker 2: do you think that those gains are coming from?
Speaker 1: So I think, first of all, we have a great deal, Frank.
Speaker 1: We had a very strong coarctor both financially and operationally.
Speaker 1: We added actually one million new postped customer customers on
Speaker 1: on broadband and why as together and as you right
Speaker 1: for it said on the wireless side of five hundred
Speaker 1: and sixty eight thousand, very strong quarter. We have great
Speaker 1: offerings in the market. We have the best network that
Speaker 1: is supporting that, and we have gradually improved now we're
Speaker 1: five six quarter sequentially improvement both operational and financially, So
Speaker 1: we not only had a great operational quarter, but they
Speaker 1: also continue to expand our margins and our cash flow
Speaker 1: for the full year was nineteen point eight billion dollars,
Speaker 1: So very strong financials with the really solid growth on
Speaker 1: customers as well. So I think the products resonate with
Speaker 1: the market today more than ever. I mean, you cannot
Speaker 1: work live play without mobility and broadband, and I think
Speaker 1: we are meeting that as the largest carrier in the country.
Speaker 3: You know, in addition to earnings, you also announced a
Speaker 3: new AI initiative as well. And how do you feel
Speaker 3: about the customers that you're bringing on when it comes
Speaker 3: to AI connect, because is this something that you believe
Speaker 3: will be a significant growth.
Speaker 1: Yeah, definitely think about this. I mean, today the majority
Speaker 1: of the NAI is large language models being developed in
Speaker 1: enumerous large data centers. When that's going to be applications
Speaker 1: for enterprises to use, they're going to go further out
Speaker 1: in the network, both for the transport cost, for privacy, security, latency.
Speaker 1: We have those assets were compute storage. We're cooling, we
Speaker 1: have power. We already have that in our system that
Speaker 1: we can host, and we already now have customers like
Speaker 1: Google Meta that is using our network for their AI work,
Speaker 1: you know. So this is just the start of it,
Speaker 1: and the second phase is going to be way out
Speaker 1: in the network and then Verizon, which have fiber across
Speaker 1: the whole concrete, have also space and cooling and as
Speaker 1: well as power. We have a lot of power that
Speaker 1: we can resell as well. So all that is creating
Speaker 1: a new business for us on existing assets that we
Speaker 1: don't need to develop, they're already there. It's a great
Speaker 1: opportunity with a big announcements of Yenai and data cents
Speaker 1: in the country, and US is the leader here and
Speaker 1: will be the winner on GENAI. I think we're a
Speaker 1: great position to be part of that. Well.
Speaker 2: Hans Corporates vand is the theme of the morning of course,
Speaker 2: with that big announcement from Meadow. When it comes to
Speaker 2: this opportunity that you see in Ai and you're ambition
Speaker 2: to be the leader when it comes to gen Ai,
Speaker 2: how much are you willing to devote of Capex to
Speaker 2: that goal?
Speaker 1: So, as I said, the majority of what we have
Speaker 1: we already have done it, deployed one or one fiber strategy,
Speaker 1: so we have fiber going around across the countrete, close
Speaker 1: to data centers, close to all the enterprises. We already
Speaker 1: have space, we have capacity or power that we can reuse.
Speaker 1: So much what we have is already invested. So we
Speaker 1: think about the second part of JNAI when the large
Speaker 1: language models are already developed and you need to be
Speaker 1: closer to the user, the company, the enterprise, or whatever
Speaker 1: it might be, and there were well positioned. We already
Speaker 1: have revenues from it today. We had in the fourth quarter.
Speaker 1: Even though we're small, we're now ramping that up and
Speaker 1: that's why we were announced today AI Connect, which is
Speaker 1: our product and solution for this.
Speaker 3: I'm also just curious about regular way Internet because if
Speaker 3: you look at the Internet subscribers that you brought on
Speaker 3: the rise or it was a decline from a year ago,
Speaker 3: but it was more than what analysts expected, and so
Speaker 3: what does that mean about the prospects of the people
Speaker 3: you are bringing on and what it means for the
Speaker 3: upcoming quarters.
Speaker 1: So I think that our broadband strategy that we laid
Speaker 1: out in the third quarter is really resonating with the market.
Speaker 1: We have two great products, where the fiber products called files,
Speaker 1: which is the I would say the highest quality fiber
Speaker 1: product in the market. We have great success with that.
Speaker 1: We added fifty thousand new customers in the quarker. Then
Speaker 1: we have fixed wiles Access, which is a totally different
Speaker 1: model where your self installed, you have great performance, high
Speaker 1: customer satisfaction. We add the more than three hundred, three
Speaker 1: hundred seventy thousand of those in the quarter. So all
Speaker 1: that product is going into next year and or twenty five.
Speaker 1: We're already next year to fortify that. And then we
Speaker 1: have our pending acquisition or Frontier that is adding even
Speaker 1: more fiber customers. So our broadband strategy is clear. We're
Speaker 1: taking share at the moment, and we think we can
Speaker 1: continue to do that into twenty five.
Speaker 2: Let's talk about the share price a little bit, because
Speaker 2: I'm taking a look over the past five years and
Speaker 2: I see Forizon shares down about thirteen percent on a
Speaker 2: total return basis. Hopefully we'll have that chart up and
Speaker 2: I want to ask CONTs, I mean, what do you
Speaker 2: think that investors are missing when it comes to your
Speaker 2: story and why are we seeing this sort of sideways
Speaker 2: chop when it comes to your shares.
Speaker 1: I think if you look at share price, I mean
Speaker 1: it's always a lot of different combinations. I think we
Speaker 1: of course invested heavily in the five E and the Spectrum,
Speaker 1: and or we took on a lot of debt during
Speaker 1: the Spectrum acquisitions in twenty nineteen. Now we're working that down.
Speaker 1: We're almost down to our death leverage of two point
Speaker 1: twenty five on debt too beta, so we are actually
Speaker 1: paying that down. So I think that our capital location
Speaker 1: has been heavy to build a network and now getting
Speaker 1: leverage on that, and that's what you see, and that's
Speaker 1: I hope our shareholders will see that that growth factory
Speaker 1: can continue and we get leverage on it. Secondly, we
Speaker 1: are on the eighteenth year of increasing our dividend. I
Speaker 1: mean there are not many companies are doing that and
Speaker 1: are of course our yield is high today given that
Speaker 1: the share price is a little bit subdue, but I
Speaker 1: think that's what our shareholders should see and the prospect
Speaker 1: of shareholders both that the dividend has been super stable
Speaker 1: and growing and then now we're also continue to grow
Speaker 1: both operationally and financially. So I have high ambitions here
Speaker 1: and I hope that every stakeholder going to see that.
Speaker 3: Certainly, the deat load was something investors were keeping an
Speaker 3: eye on, and as you have made a lot of
Speaker 3: progress in terms of reducing that load, I do still
Speaker 3: wonder you had come off an announcement of a massive acquisition.
Speaker 3: Do you see more potential acquisitions if you're able to
Speaker 3: tap the capital markets or find it otherwise? Wondering what
Speaker 3: your inclination here is to do more to expand your
Speaker 3: reach to mergers and acquisitions.
Speaker 1: So our strateted is pretty simple. We build one network
Speaker 1: and we want as many profitable connections on top of
Speaker 1: it any type of the segments of the market. Today,
Speaker 1: we're are the number one on wireless. We have a
Speaker 1: nationwide so we already have it, so now it's just
Speaker 1: to continue to get leverage on on broadband. We just
Speaker 1: acquired or in the process acquiring Frontier, we have a
Speaker 1: great broad and offering. We're planning to address one hundred
Speaker 1: million households with our broadband offering. So I think we're
Speaker 1: sitting really good with assets we have, and that's what
Speaker 1: I want to execute on. As a CEO, you can
Speaker 1: never say you're never going to do an acquisition. But
Speaker 1: clearly we have all the assets right now, and now
Speaker 1: we are in execution mood, and see that we leverage that.
Speaker 2: All right, Hans really appreciate your time. That is Hans'
Speaker 2: best or of Horizon