Verizon’s leadership is a lot different than it was just one year ago, and that seems to suit CEO Hans Vestberg just fine.
Speaking at a UBS investor conference today, Vestberg acknowledged that the majority of the people reporting to him have changed this year.
The CMO position remains open and he wants to find the right person to fill that role. However, “I have a great team,” he said. “The teams knows what to do.”
A year ago when Vestberg appeared at the UBS conference, the company had just ousted Manon Brouillette as head of the Consumer group after several dismal quarters, with Vestberg taking over her duties. That lasted for a few months, and in March, Sowmyanarayan Sampath moved from heading Verizon’s Business group to taking over the Consumer division.
Vestberg said Verizon didn’t have the right product on the consumer postpaid wireless side of the business in the first part of 2022. They made adjustments and brought in the new leadership team, and right now, “we have had good momentum” through the year and going into this holiday season.
He said myPlan is resonating with customers and the perks are growing. Today Verizon announced a new offer where starting December 7, it will offer ad-supported services from Netflix and Max together for $10 per month. That’s a savings of more than 40% and the offer is exclusive to Verizon, Vestberg said.
The myPlan offer is a unique concept and Verizon spent a year researching before launching it earlier this year. In the beginning of the first couple weeks, the take-up rate was down, but it’s now resonating with sales staff and consumers, both digitally and in stores, he said. It offers optionality and flexibility in the perks customers choose, plus savings for the streaming services, he said.
Broadly speaking, the consumer wireless segment is seeing sequential improvement in net adds and doing better than last year. The regionalization they did when Sampath took over, with six market presidents, is working, he said.
“Our priorities are very clear going into next year,” with continued service revenue growth and expansion of EBITDA and cash flow, he said.
On the prepaid side, where Verizon continues to lose customers since it acquired TracFone, “we’re not where we want to be yet,” he said.
FWA going strong
Verizon expects to have 4 million to 5 million fixed wireless access (FWA) internet customers by 2025 and it’s built the network for more than that, he said. As they roll out more C-band spectrum, they can offer it to more customers.
Vestberg said he wants to show shareholders and investors that they will deliver on what they said, and they have a cadence of around 400,000 net broadband customers each quarter, including both FWA and FiOS. That’s a good strategy, he said, because it’s not helpful to get 600,000 or 700,000 one quarter and 100,000 the next; they have to balance their capital rollout, marketing and other pieces of the organization.
Asked if they would use millimeter wave spectrum on a non-mobile basis to go after the FWA market, he said yes, when it makes sense. Right now, it’s very much focused on private networks and where they see hotspots for mmWave.
They’ve also been very focused on consumer broadband being the use case for FWA, but they’ve seen over the last several quarters that the business side is growing as well. In that sense, it’s just adding more to the bottom line because they only need to build one network to serve mobility and use the same network for FWA.
M&A?
With TDS exploring the sale of UScellular, he was asked about Verizon’s interest in acquisitions in general.
As CEO, Vestberg said he needs to acknowledge they look at everything happening in the market. However, “I really love my assets I have right now,” he said. “I prefer to execute on what I have today. I think that's way more important than adding something. We have all the assets we need.”