Verizon at Deutsche Bank Conference: Strategic Insights for 2025

On Tuesday, 11 March 2025, Verizon Communications Inc. (NYSE: VZ) presented at the 33rd Annual Deutsche Bank Media, Internet & Telecom Conference. Chief Revenue Officer Frank Balvin outlined the company’s strategic priorities, focusing on personalized customer experiences and service revenue growth, while acknowledging challenges like increased competition and changing consumer behaviors.

Key Takeaways

• Verizon plans to reduce churn through personalized customer treatment despite price increases.
• The MyPlan strategy offers customers more control over connectivity and add-on services.
• Fixed Wireless Access (FWA) is expanding, targeting 90 million homes in the future.
• Verizon expects wireless service revenue to grow significantly in 2025.
• The company is leveraging AI for enhanced customer interactions and operational efficiency.

Financial Results

• Wireless service revenue grew 3.2% in 2024, with expectations of 22.8% growth in 2025.
• Price adjustments are projected to generate over $1 billion in service revenue next year.
• More than 45% of lines are on premium plans, contributing to ARPA growth.
• Prepaid services, previously a revenue drag, are expected to be accretive in 2025.

Operational Updates

• Churn reduction is a priority, with expectations of lower churn year-on-year.
• Customers are holding onto their devices for over 41 months on average.
• Verizon is expanding its FWA footprint, aiming to reach 90 million homes.
• The TracFone acquisition has revitalized the prepaid segment, with plans to open 2,000 branded retail stores.

Future Outlook

• Verizon aims to increase postpaid phone net adds in 2025.
• Broadband additions are expected to continue, with fiber expansion plans targeting 30 million premises by 2027.
• AI will play a crucial role in customer service and personalized offerings.
• Satellite technology is viewed as a niche service, with limited impact on customer switching.

Q&A Highlights

• Competitive intensity remains high, with peers maintaining promotional activities.
• Immigration policy changes may affect the low end of the prepaid market.
• ARPA growth is anticipated due to premium plan adoption and non-connectivity services.
• Convergence is seen as a demand-driven trend, leading to higher ARPA and reduced churn.

For a detailed understanding of Verizon’s strategic plans and financial outlook, refer to the full conference call transcript below.

Full transcript - 33rd Annual Deutsche Bank Media, Internet & Telecom Conference:

Brian: Good morning, everyone. We’re ready to start our first session for the day. So I’m excited to introduce Frank Balvin, who is the Chief Revenue Officer for Verizon Consumer. Welcome, Prank.

Good morning, Brian. Maybe we could start off with the competitive landscape. What are you seeing in the market in terms of industry switching activity, retail store traffic, promotion levels, that sort of thing?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Before we get started, hopefully everybody has read the Safe Harbor behind me. It’s coming. Okay. So jumping right in, this Q1 is a bit unusual. We used to say that the holiday season starts earlier every year.

Christmas comes early. This year, Christmas is lasting longer. At the beginning of the quarter, when we drop out of our holiday promotions, our peers did not. So we’ve seen an elevated level of competitive intensity in the quarter. We continue and have a disciplined approach.

When we see less demand, we pull out of promotion. When we see demand picking up like in March, we come back with a new promotion. So it’s been a challenging quarter from a competitive intensity standpoint. Do

Brian: you think that there’s any softness from an industry standpoint? It’s too early to tell that or is it purely competition that’s maybe

Frank Balvin, Chief Revenue Officer, Verizon Consumer: educating environment? It’s mostly driven by competition. As far as we’re concerned, we have a tough compare year on year. So growth side this quarter are going to be probably soft. Okay, all

Brian: right, helpful. What is yours and SandPath’s focus this year to build on the successful improvements that you’ve made over the last eighteen months to improve postpaid volumes? Is it gross adds? Is it churn? Is it both?

Where do you see the opportunity to drive improvement? How do you go about doing that?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So in 2024, we returned to phone net add positive, excluding second number, and we grew wireless service revenue at 3.2%. So we want to continue with the same formula. So on a full year basis, we want to continue and grow phone net adds in 2025 versus 2024. And we’ve guided for wireless service revenue to grow between 22.8% at the firm level.

So growing phone net year on year is our priority. How do we achieve it? Number one goal in 2025 will be churn reduction. We have invested in our capability to personalize the treatment of our customer base. So that will be a major lever to drive churn down in 2025, even if we’ve made a deliberate decision to have all of our price ups in 2025 at the beginning of the year to have a full year almost a full year impact on service revenue.

If we look at the full year impact of the price up we did in the back half of twenty twenty four and early twenty twenty five will generate more than $1,000,000,000 of service revenue in 2025. And obviously, that’s creating an headwind pressure on churn early in the year that we are working through. But on a full year basis, we’re confident that our churn levels will be down year on year. Okay.

Brian: And you’re entering this period of increasing promo roll offs. What are the steps you’re ensuring to take excuse me, what are the steps you’re taking to ensure high retention of those subscribers? And will this put some upward pressure on churn as these roll offs occur?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So exactly three years and a month ago now, we moved to systematic thirty six months device financing. And we had on February one of this year, the first three year anniversary of the first cohort that got onto a thirty six month device financing. And what we are observing is a change in customer behavior. Customers, when we were in the twenty four month device financing regime a few years ago, would tend to have an elevated upgrade rate and an elevated churn at the twenty four months mark.

What we’ve observed is a change in customer behavior. They are now on average keeping their devices more than forty one months in our customer base. And basically, customers are not in a hurry to upgrade at the end of their device financing. If their device is still in good working condition, they keep it longer. So as we see more customers coming out of contract this year, significantly more than last year, we see them upgrading progressively, not all at once as they get out of contract.

So on upgrade, we are still expecting middle single digit growth rate year on year, but with a slow start in Q1 and then a progressive ramp up through the rest of the year. Okay, understood.

Brian: Sampath had indicated on your fourth quarter earnings call that he expects 8,000,000 to 8,500,000.0 industry postpaid phone net adds this year across both business and consumer. What’s the confidence level on that estimate? And can you just talk about how you arrived upon it?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So the last couple of years at an industry level consumer and B2B together, the industry generated more than EUR 9,000,000 net adds in 2024, in 2023 and I think in 2022 as well. And if you unpack that EUR 9,000,000, it’s about 80 percent consumer and 20% business. Within the consumer part, you have 4,000,000 to 4,500,000 net prepaid to postpaid migration and 3,000,000 is the demographic factors, So kids getting their first smartphone compensated by older people with a smartphone dying. That’s about three million.

We expect the makeup of the 80% that are consumer to go down a little bit and 8% to 8.5% versus the 9% we saw in 2024.

Brian: Okay. What are you seeing specifically from the cable operators as far as competitive intensity? And what are your expectations for Comcast’s new offer strategy that they’ve said is coming?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: What we’ve been observing so far is more of the same from the cable competition. I won’t comment specifically on a particular competitor, but we don’t expect a radical change here from what we are observing in the market. Having operated in Europe, what I can tell you is that when there is a large mobile virtual network operator in the market, you are better off having them on your network. When I look at our position, when we lose retail customers to the cable company, we retain wholesale revenue. So we lose only the spread between retail and wholesale.

And when they get customers from our competitors, we get wholesale revenue. And they take from us less than our fair share of the retail market. So overall, it’s significantly accretive for us. So we are in a good position when it comes to the wholesale market and DMS on the mobile side. I’ll comment on the broadband side later.

Okay.

Brian: Do you think there’s maybe a natural level at which cable net adds begin to decelerate? And if so, do you think we’re anywhere near that at this point?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: When I look at the trajectory of the cable companies, what I observe is that the port ratios are flattening year on year. So certainly, the growth from a net adds standpoint is decelerating. Okay. Helpful.

Brian: Shifting gears a little bit, the new administration’s policy toward immigration has raised questions over the impact on industry subscriber on the industry subscriber pool. How do you expect your postpaid and prepaid businesses to be affected by fewer immigrants entering The U. S. Via the Southern border and also by potentially increased deportations, where would this show up in your business, if any more?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So without speculating on what is going exactly to happen, I’d offer two comments. First, we expect very limited impact on the postpaid side, where customers have got to provide some form of identification to get onto a postpaid contract onto a device financing contract. So if there is any impact, we will see it towards the low end of the prepaid market with limited exposure for us. As a matter of fact, immigration started to tail off in the back half of last year, and that didn’t prevent us to return to full net positive on the prepaid side.

So we see some exposure most likely at the bottom end of the prepaid market, if any.

Brian: Okay. That’s interesting. Yes. So when President Biden’s executive order went into place, so I think it was in June, you didn’t really see any impact in the back half of the year?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: No. We’ve continued to improve our trajectory on the prepaid side. Okay.

Brian: Over the past few years, we’ve seen historically low levels of upgrades for Verizon. That trend seems to have bottomed in ’24. You mentioned you expect upgrades to be up mid single digit. I guess you addressed it to some degree, but can you just explain the mid single digit increase, put it into context and I guess maybe address why it might potentially not be higher than that?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So the first thing at the macro level is we are not witnessing what you call a super cycle in terms of handset cycle. So what we see, whatever the ecosystem is consumers keeping their devices longer. And the main driver of upgrade is getting a brand new battery in your smartphone. So less and less reasons to upgrade.

So we see year after year the average life of a device in our customer base increasing. As I was saying earlier, we’ve passed now forty one months. So that’s the most structural driver. The second one is customers getting out of contract and customers getting out of contract eligible for an upgrade promotion. That co op is much larger for us in 2025 than 2024.

That’s why even if overall customers are upgrading at a slower pace because we have more customers out of contract, we think we’ll be in the mid single digit upgrade rate on a full year basis with a slow start in Q1 and a progressive ramp up. And usually, we have significantly more upgrades in the last quarter of

Brian: the year. So that’s interesting. So obviously, longer contract periods have led to lower upgrade rates, but it sounds like the biggest factor is actually better batteries, longer battery life?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: That’s what we observe when we surveyed our customer base. All right. Interesting.

Brian: What are the various ways a higher pace of upgrades will impact the business? And how do you plan for that?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: When customers do upgrade their device, it’s an opportunity for us to migrate them onto my plan, to step them up to a premium plan, sell perks, sell other attached lines, tablet or watch, cross sell home broadband if they are eligible. So it’s an opportunity to upsell and cross sell when the customer engages with us for that transaction. Okay.

Brian: Talk about the ARPA outlook a bit. Verizon recently put in place two price ups. How are those received by the base? And what’s the opportunity that you think you still have to take pricing in the future? Yes.

Frank Balvin, Chief Revenue Officer, Verizon Consumer: So the first thing I want to insist on price ups is it’s largely accretive. So as I said earlier, when you look at the net impact in terms of wireless service revenue of the price ups we did in the last six to seven months, it’s more than $1,000,000,000 of service revenue. That’s net of any churn caused by those price ups, okay? So that’s a trade off I would make any day. If I look at the drivers of our ARPA average revenue per account beyond the price ups, first, we have step ups to premium plans.

We have now more than 45 of our lines at the end of last year on premium plans, and that continues to grow. And we drive the step ups with our tiered promotional strategy. So that’s one driver. The second driver is non connectivity product and services that we sell to our customers. And those amount to about 15% of the ARPA and are growing double digits.

So I’m talking about the perks in the MyPlan construct, our protection services, our cloud storage services, our family services, etcetera.

Brian: A lot of people buy the cloud storage. I mean, I think a lot of people on Apple use iCloud. I was just curious as to is it more the Android based that’s buying it? Or do Apple customers do it as well?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: So if you look at our perks today, we have three services that offer offer cloud storage. We have one of the perk is Apple One. We’ve just added Google One Premium and we have the Verizon Cloud.

Brian: Okay.

Frank Balvin, Chief Revenue Officer, Verizon Consumer: And we see the three services doing reasonably well. You have customers who want to stay in the same ecosystem, iOS or Android, and you have customers who want a storage solution that is independent of their device and their ecosystem. Okay. So we see a balance between the three options we offer.

Brian: Interesting. So more than half the base is on MyPlan. And as you mentioned, it allows you to sell Perks. How would you characterize the success of Perks overall? What are some of the measurable ways it’s affected business performance?

And how important is this going forward to the execution of the strategy?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So maybe let me take a step back and come back to the genesis of my plan. Okay. Before my plan, we used to have, like our peers, inclusions in our wireless plans. And we surveyed customers and what they told us that they wanted control, flexibility and choice.

They wanted to be in command of what is going into their wireless plan. So we designed that new structure where you choose your connectivity first, good, better, best, so welcome, plus and ultimate. And then you decide which additional services you want on top of connectivity. That’s what we call perks in the MyPlan construct. And those perks, they come with unique savings.

As an example, for streaming services, you can get for $20.05 streaming services, the Disney bundle, Netflix Max, same savings for Apple One, YouTube Premium, etcetera. So we give our customers unique savings. All those partnerships are exclusive. And we have a mix of third party perks and Verizon perks. So overall, it’s a good margin business and the momentum has been very strong.

I think by our Investor Day back in October, we said we were already at 7,000,000 perks. By the end of this year, we are on a trajectory for 14,000,000 perks. And we see also the fastest adoption of our in market price plan we’ve ever witnessed. We have already more than half of the base on my plan. That’s very, very fast.

Brian: Yes. Let’s move to convergence a little bit. So the convergence of home broadband and mobile has obviously been a major point of discussion in the industry. How do you expect convergence to evolve in The U. S?

And just given your experience, how would you compare and contrast that outlook to the path that convergence took in Europe?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes, that’s a great question. So I think I’ll talk about two things, convergence, The U. S. Way and convergence the Verizon way, okay? So convergence The U.

S. Way, what do I mean by that is if you look at the markets in Europe where convergence destroyed value, that was supply led and the root cause was the regulatory framework. So there was either open access on the broadband side or open access in some cases on the mobile side or both. And that dragged industry prices down and some markets have not recovered. And they’ve reached convergence level in terms of households that have a conversion offer of 70%, if you take Spain or France, but at the expense of the value creation in the industry.

Convergence, The U. S. Way is demand led, not supply led or regulatory led. And as far as the Verizon is concerned, so convergence the Verizon way, what we want is to offer a full solution to our customers. So yes, there is a price advantage.

You get a small discount on the broadband side. But if you are a premium customer, you get a free perk and you get better customer service. So overall, convergence for us will be accretive. It’s leading to higher ARPA, lower churn, whether it’s on the fiber side or FWS side. And we see more and more customers willing to have all of their services from Verizon.

We are at the end of twenty twenty four, we have sixteen one sixth percent of our mobile customers that have broadband with us. And we expect that to continue and grow in the coming years.

Brian: I’m going to scooch back a little because I’m being blinded by the sun. Forgive me.

Frank Balvin, Chief Revenue Officer, Verizon Consumer: The reflection on the sea. So

Brian: the downside of the view, I guess. So Verizon has a robust fixed wireless effort and Fios footprint, the latter of which you’re planning to expand to 30,000,000 premises. That’s up from 18,000,000 today. How do you utilize these two access technologies in a complementary way to optimize that home broadband and convergence opportunity?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: So last year, to start with the data point, we on the consumer side, we added more than 1,000,000 broadband households between our fiber product and our FWA. So we have strong momentum, and we expect that to continue this year. And the way we market our broadband service is not technology based. We market our broadband services under the Verizon home Internet umbrella. So that allows us to do nationwide communication.

And based on your eligibility and your exact address, we position the particular technology offering, whether it’s fiber, five gs home or soon our IMDU solution.

Brian: When did you go to that strategy of marketing that way, by the way?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: That allows us to have a nationwide effort. So whether it’s from an advertising standpoint or an offer standpoint or promotion standpoint, we can have economies of scale in our broadband efforts. That’s why you have Verizon Home Internet as a product name. We have the same value proposition. So My Home, which is the mirror value proposition of My Plan, is offered both on fiber and fixed wireless access.

Same construct, by the way, same pain points of customers. They want to control what’s going into their plan. So My Home is a good, better, best in terms of network speed, I’m simplifying. And then you choose the perks on top.

Brian: How are you making decisions regarding where to build fiber to the premises? What led to the decision to begin accelerating fiber build in your current footprint? And does having fixed wireless in the portfolio impact that decision making process on where it builds?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. We see an opportunity in our ILEC footprint to convert to fiber. And the pace of conversion is dictated by the return on investment. So that’s primarily the only yardstick we use. And together with the Frontier acquisition that we expect to close at the beginning of next year, By 2027, we’ll be close to 30,000,000 households, so in an ILEC footprint.

And outside of that ILEC footprint, we’ll have our FWA product. So we have a two pronged approach to the broadband market, giving us the largest open for sale, if you want, combining both technology and allowing us to offer a complete value proposition, mobile and home, to customers. So the best connectivity at home and on the go for a large number of households.

Brian: And on fixed wireless, management’s guided to a bit slower pace in fixed wireless net adds during the first half of the year. Just wanted to understand what’s driving that slowdown and then the expected subsequent reacceleration in the second half of the year?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: So we had our Broadband Investor Day in October. We’ve doubled our guidance in terms of fixed wireless access over time from 4,000,000 to 5,000,000 to 8,000,000 to 9,000,000. And we’ve guided on between consumer and business between three fifty and four hundred thousand broadband additions every quarter. We’re going to stay in that ballpark with some seasonal fluctuations from one quarter to the next. If I look at the consumer side, we are confident in our ability to continue and grow both fiber and fixed wireless access.

On the fiber side, every year, we open new households with fiber connectivity. We penetrate faster. So our go to market machine is getting better year after year on the new open forested on the fiber side. And on the FWA side, we expand the footprint as we complete the C band deployment. And we are introducing also new products.

We just introduced a backup product. We are about to introduce an MDU solution to continue and diversify the portfolio and increase the penetration.

Brian: Can you share some other details around the fixed wireless effort? For example, how many homes are open for sale? Where that number is headed, maybe talk about where you’re winning in the market, what types of customers are taking fixed wireless, the high quality subs, what kind of credit scores do they have, just any kind of details around that, how much are coming from cable, just to help us kind of understand a little better?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. We finished the year at about $60,000,000 open for sale and we’ve guided in our Broadband Investor Day that over time, that will get to close to EUR 90,000,000. If I look at the makeup of the Fixed Wireless Access customer base, First is, it’s largely cross sold to existing mobile customers. So 75% roughly of our Fixed Wireless Access gross adds are taken by existing mobile customers. If I look at their origin, the majority of them are coming from cable.

And we have also a very healthy premium take rate. So we have two products on the fixed wireless access side, five gs Home and five gs Home Plus, and the majority of customers are on the premium product. Okay.

Brian: One thing I was curious about is how does the product perform where it competes with fiber to the home? What do you see from a take rate and penetration perspective there, share perspective?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: So if I look at customer satisfaction, important metric here, we have a very high NPS score for both our FWA product and our fiber product. And if you think at the needs of a typical household, they are covered by the FWA product. So it competes effectively whether it’s with cable or fiber. Because of the cable in base, we see more customers coming from cable to fixed wireless access than from fiber, but that’s just a function of the relative sizes of those technology customer bases. Okay.

Brian: How about other competitors’ fixed wireless efforts? How have those impacted the Fios base? Have you lost any subs to fixed wireless from other carriers?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. We are certainly losing some. But when I look at the performance of Fios, we are posting very strong net adds quarter after quarter. So whatever we are losing from fixed wireless competition in the Fios footprint, we more than compensate by taking customers from the cable competitors that overlap with us in the Fios footprint. So we had a good Q4.

We had a good 2024 on Fios, and we expect that to continue this year.

Brian: Okay. Shift gears a little bit to the Direct to Device segment, which I think your CTO called out in his blog as one of the key technology trends to watch this year. And there’s obviously been a lot in the market about it. But you’ve established a relationship with AST SpaceMobile for direct to device. How important do you think it is to be able to offer satellite broadband and voice coverage to your customers?

Any sense for how much of the base would value this and be willing to pay for it? And any kind of thoughts on how you might think about pricing the pricing construct for it?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: So first of all, we have a great network. We have great coverage. And so we have less white spots than some of our competitors. So less of a need for a complementary solution. Having said that, there are some use cases where direct from satellite to smartphone will be useful.

When we surveyed our customers, we see that there is a demand for it, but it’s very niche. So our approach there has been to offer in partnership with Skylo and then AST a complete solution. So emergency SMS, bidirectional SMS and then voice and data, but with the free layer of service that customers do expect and only when we have a full solution, we’ll have a paid for service. But we don’t think based on the all the customer service we do that it’s a reason to switch from one provider to another. It’s a complementary service.

It’s an add on, but not a reason to switch.

Brian: Okay. All right. Staying on the topic. So T Mobile did something interesting when they launched the data for STARLINK by inviting Verizon and AT and T customers to join the beta. Just wondering how you think about the potential churn threat there as they go to commercial launch, because Verizon and AT and T customers will then be charged secondly, customers presumably provide their contact information to T Mobile when they sign up.

So it allows T Mobile to target them with direct offers. So just wondering how you’re thinking about that competitive threat. And are you able to tell how many Verizon customers opted into the beta so far?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: No, I’m not able to tell the exact number. What I can tell you is that we’ve seen insignificant volumes of our customers inquiring about satellite, whether it’s in customer service or in our stores. Second comment, the pricing offered by our competitor seems a bit rich given the low demand for that service. So again, I don’t expect it to be a driver of switches.

Brian: Yes. Have you seen many people using the Globalstar option on Apple phones in your base? I mean, it doesn’t seem like it’s ever really been marketed, but it’s available.

Frank Balvin, Chief Revenue Officer, Verizon Consumer: It’s been used mostly in emergency situation, meaning it’s very rare. Yes. So as I said, we don’t see massive usage there. It’s more a peace of mind type of feature that some customers do value.

Brian: And that’s text only. Do you see the demand though being fundamentally different when you move to a broadband and voice solution?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: We’ll expect that there will be a bit more demand, but again, niche, probably significantly smaller than international roaming as an example. Right. Okay.

Brian: You’re expecting prepaid to return to positive revenue growth in 2025. Can you talk about that journey you’ve been on in prepaid over the past few years, including the TracFone acquisition, steps you’ve taken to turn the business around and what’s the algorithm behind that turnaround, so to speak?

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So it’s been a great success story. We closed the acquisition of TracFone in November 2021, if I’m not mistaken. And our team has been very busy since. So what did we do?

TracFone was an MVNO. So TracFone was not able to compete at the high end of the prepaid market. Their unlimited price points were not competitive. So what we’ve done is we’ve repositioned all the brands and all the value propositions in the TracFone portfolio. So now each brand has got its target segment, its primary channels and we’ve revamped all the value propositions.

So that is the first thing we’ve done. Second, we wanted to grow a prepaid brand with its own branded retail stores. So that’s what we are doing with Total Wireless. And we’ve done it in record time. We grew from zero to 700 stores by the end of twenty twenty three.

By the end of last year, we were at 1,200. And by the end of this year, we’ll be around 2,000. So total wireless is growing fast in and attacking the segment of prepaid customers that want to do business in a branded retail store. We’ve also accelerated the momentum of our digital only prepaid brand, Visible, and repositioned our exclusive brands our base our base management capabilities to improve churn. So we finished 2024 full net add positive on prepaid, excluding SafeLink.

And in 2025, will be better year on year on PhoneNet and will return to revenue growth year on year. In 2024, prepaid was a drag of about 80 basis points. It will be accretive from a revenue standpoint in 2025.

Brian: Okay, great. And last question I wanted to ask you relates to AI. How significant do you think artificial intelligence will be in telecom services? What are the ways you’ll leverage it in consumer to drive a better customer experience and enhance your sales processes while at the same time increasing operating efficiency? It seems like telecom is one of kind of the big industries that can stand to benefit from AI.

Frank Balvin, Chief Revenue Officer, Verizon Consumer: Yes. So the AI revolution didn’t start with ChargeGPT being public. We’ve been at it for a number of years, at least five or six years. In my area, we’ve been using AI and machine learning for propensity modeling, propensity to churn, propensity to add a product, etcetera, for quite some time now. We’ve been using AI also in our call centers for the AI to listen to the conversation and then prompt our rep to offer a personalized offer promotion to customers, so real time during the call.

So it has been a continuous journey, and we’ve been investing in those capabilities for a while. Now if I look moving forward, we have opportunities in our network in many different places. And Joe is better placed than me to comment on how and when and how much. It’s an opportunity on the B2B side as well with solutions that serve the AI ecosystem. On the consumer side, we have several opportunities.

If I start with the value proposition side, we introduced our first perk that offers Gemini Pro to customers, the Google One premium perk for $10 savings for customers. And we’ve been pleased by the take up rate from consumers. So there is demand starting to materialize and customers ready to pay for a premium AI service. And then we are using it to improve the productivity of our front line, whether it’s in stores or in customer service. We’ve introduced new tools, personal research assistant, to help our front line navigate very quickly amongst our portfolio of offers.

And the same tools are available also for consumers by themselves when they want to transact with us digitally to access personalized service, personalized recommendations. So AI will continue and grow in importance for us.

Brian: Mass personalization seems to be one of the

Frank Balvin, Chief Revenue Officer, Verizon Consumer: things I would say. Yes. So personalization at scale is the name of the game for us this year. And coming back to your question about churn, why is personalization important? Because the more we sell services to our existing customers, so adding phone lines, tablet lines, which is perks, protection services, the more loyal they are.

So personalizing the experience, adding services is a virtuous circle. It improves ARPA and it reduces churn. That’s why personalization is key for us. Okay. All

Brian: right. We’ll wrap it up there. We’re out of time. Thanks, Frank. Appreciate it.

Thanks, everyone.

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