Verizon Chairman and CEO Hans Vestberg said that the company will report positive consumer postpaid net adds in Q4 when it reports its quarterly and year-end 2022 earnings later this month.
Speaking at the Citi 2023 Communications, Media & Entertainment conference, Vestberg noted that while postpaid net adds are one measurement for the operator, there are also other important metrics that he closely monitors such as increasing the company’s wireless service revenues.
Vestberg’s remark about the company’s consumer business is notable because that division experienced three dismal quarters in 2022. In Q1 Verizon reported a loss of 36,000 postpaid consumer phone subs, in Q2 it reported postpaid phone net losses of 215,000 and in Q3 Verizon lost 189,000 consumer postpaid phone customers.
These losses also prompted the December departure of its consumer business CEO Manon Brouillette. Vestberg is currently handling all of Brouillette’s duties.
When asked how the company is turning around its consumer business, Vestberg said that the Verizon is trying to appeal to different postpaid market segments by introducing new rate plans such as its Welcome Unlimited plan that provides unlimited talk, text and data for $30/month when the consumer brings their own device. Vestberg also hinted that the company is considering more promotional offers and is also evaluating its commission structure in its retail stores. He also talked about “more agile decision making” occurring within the consumer organization, including moving decision-making lower in organization so that it can respond more quickly to competition and other market dynamics.
“We will segment in certain areas and will have more competitive offerings but still preserve our premium offerings and grow our service revenue,” Vestberg said.
On the prepaid front, Vestberg touted the company’s September introduction of Total by Verizon, a new prepaid wireless brand, and said that the company was still integrating its Tracfone business that it acquired in late 2021. Vestberg said that the company is still working to migrate Tracfone customers that are on other wireless networks to Verizon’s network. In addition, Verizon hopes to eventually be able to seamlessly migrate customers from a prepaid platform to postpaid but he said that Verizon technically can’t support that right now.
C-band progress
Verizon is not only making enhancements to its consumer business, but it also is drilling down on its 5G network buildout. Verizon President of Global Networks and Technology Kyle Malady, who joined Vestberg at the investor conference, said that the company’s One Fiber buildout is 80% complete and that Verizon has now deployed more than 40,000 fixed wireless access (FWA) nodes in its network.
Malady said that Verizon will continue to build its C-band network and will meet its goal of passing 200 million people in Q1. He also said that where the company has its C-band spectrum deployed, it is seeing an increase in usage among its subscribers in those markets. “We are receiving great feedback on it,” he said. And Vestberg noted that in markets where C-band is deployed, the company is seeing more “step-ups,” a term Vestberg uses to describe existing Verizon customers that migrate to a higher priced rate plan.
However, Vestberg also said that while the company will still be building out its C-band spectrum in 2023, it will likely require less capital than it did in 2022. He said that he expects Verizon will return to its typical capex spending of about $17 billion this year and in 2024.