Verizon Communications Inc. CEO Hans Vestberg Discusses Strategic Priorities and Growth at JPMorgan Global Technology, Media and Communications Conference

Key Takeaways

TL;DR: Verizon (VZ) highlights accelerating svc rev. growth (Q1: +2.7% YoY), record-high EBITDA ($12.6B in Q1), and capital allocation discipline (dividends, debt reduction, Frontier deal). Key growth drivers include segmented wireless offerings, fixed broadband convergence (Fios + FWA), and 5G/GenAI monetization. Elevated churn expected to normalize post-price adjustments by H2 2025.

CONSUMER WIRELESS & PRICING STRATEGY

• Price Lock Impact:
  • 50% of postpaid customers now on myPlan (modular wireless) w/ 3-year price lock (introduced April 2025).
  • Elevated churn expected to normalize in H2 2025 post-price adjustments.
  • DD gross-add growth maintained post-Launch; >50% of adds are converged (broadband + wireless).
• Segmented Growth:
  • Portfolio spans 8–9 brands (prepaid to ultra-premium), driving prepaid growth (first green Q in Q1).
  • Total Wireless (mid-tier prepaid): Adding ~3 stores/day.

FIBER & FIOS EXPANSION

• Fios Build:
  • Accelerating fiber build to 650K Open for Sale (OFS) in 2025 (+44% YoY). Plans to exceed +1M OFS/year post-Frontier close (pending regulatory approval).
  • Low Fios churn; ~340K broadband adds in Q1 (majority converged).
• Fixed Wireless Access (FWA):
  • Q1 net adds: 339K; targeting 8–9M subs by 2028.
  • MDU Solution: Launched in 15 markets (multi-dwelling units) to expand addressable market.

5G DEPLOYMENT & TECH EDGE

• C-Band Coverage:
  • On track for 80–90% coverage in 2025 (full deployment by 2026). Priority on mobility (vs. FWA) to reduce churn and drive premium mix.
• GenAI & Enterprise:
  • AI Connect: Growing enterprise interest in edge computing for GenAI workloads (security/latency benefits).
  • Private 5G Networks: Dozen+ deals in Q1; scaling w/ 5G standalone core (70% deployed) enabling faster deployment.

FINANCIAL PERFORMANCE & CAPITAL ALLOCATION

• Q1 Highlights:
  • EBITDA: $12.6B (+4% YoY), FCF: +37% YoY.
  • Net unsecured debt/EBITDA: 2.33x (targeting 2.25x pre-Frontier).
• Capital Priorities:
  • Dividend: 18th consecutive annual raise (2024: $11.2B).
  • Debt Reduction: $11B repaid in 2024; $1.5B in Q1 2025.
  • Frontier Deal: Adds $11B debt (~0.25x leverage) but expands fiber scale.

RISKS & CATALYSTS

• Churn Normalization: Execution on price-lock stabilization critical for H2 2025 svc rev. trajectory.
• FWA Network Capacity: Usage parity w/ fiber (6% YoY growth) alleviates congestion concerns.