Verizon conducted a lot of research before it came up with the myPlan offer that was unveiled last week. The company basically found that consumers want control, value and simplicity.
“All these three together was very important for our customers,” Verizon Chairman and CEO Hans Vestberg said during the J.P. Morgan Global Technology, Media and Communications Conference on Tuesday. “That’s why we launched the myPlan.”
The new offer allows the customer to pick their network solution – basic or advanced – and then add perks on top of that for a charge of $10/perk. Welcome Unlimited is $65/month for a single line. Unlimited Plus is $80 for one line.The add-on perks range from Disney+ and Apple TV to international roaming. There are currently nine perks from which to choose.
“We're being in the forefront, thinking about the customers being in control,” he said. As Verizon Consumer Group CEO Sowmyanarayan Sampath said last week, Verizon should make some 30% margin on those perks on average.
Verizon traditionally has done well with the high end of the wireless market, and it continues to do so, according to Vestberg. He admitted that Verizon did not do well in the low end of the postpaid market last year and some of that crept into this year.
But he said it’s now moving in the right direction. The churn that the company saw last year as a result of a price increase was expected. The perks associated with the new myPlan are supposed to entice customers to stay longer.
“We have to continue to grow our service revenue and expand our EBITDA and cash flow,” he said.
New team & good vibes
Summing up the mood, J.P. Morgan analyst Phil Cusick commented that Vestberg seemed to be in a better mood than some previous meet-ups.
“I'm always in a good mood, but I can be upset over things that is not working,” Vestberg responded. “I think that what you're referring to last year, I wasn't really happy. We didn't perform well, so I was upset. I think I'm energized with a new team that is coming in. I'm energized with the momentum we're creating in basically all business we have decided to be in.”
Verizon has divested everything it wanted to divest and it bought everything it desired, from TracFone to C-band spectrum. “We have done a lot..I mean, now the team needs to execute. That doesn’t mean we’re done… We can do so much more.”
Ultimately, it’s about growing the service revenue and expanding on the cash flow, he said.
Here are a few more items from Vestberg’s conversation at the J.P. Morgan event:
- The killer application for 5G today is fixed wireless access (FWA), he said. Verizon reported 393,000 FWA net adds in the first quarter of 2023, bringing its total FWA subscriber base to 1.9 million. These customers use the same network that Verizon built for its mobile customers. Businesses are also using the FWA internet service.
- More than 50% of all Verizon’s radios are using Verizon’s fiber. The question then is, why not the other 50%. Some of them are very rural and fiber isn’t available, they’re renting fiber or using some other technology for backhaul.
- Verizon’s capital spending this year will be in the range of $18.25 billion to $19.25 billion, down from almost $24 billion in 2022, as it winds down its C-band-related spending. It will continue to invest to boost capacity.