Q4 2021 Verizon Communications Inc. Earnings Call
Hum.
Hum.
Hum.
Uh huh.
Okay.
Good morning, and welcome to the Horizon fourth quarter 2021 earnings Conference call.
At this time, all participants have been placed on listen only mode and the floor will be opened for questions. Following the presentation.
To ask a question press star one on your Touchtone phone.
If at any point. Your question has been answered you may be right.
Yourself by pressing star two.
Today's conference is being recorded any objections you may disconnect at this time.
Now my pleasure to turn the call over to your host Mr. Brady Connor Senior Vice President of Investor Relations.
Thanks, Brad Good morning, and welcome to our fourth quarter earnings Conference call. This is Brady Connor and I'm here with our chairman and Chief Executive Officer, Hans Vestberg, and Matt Ellis, Our Chief Financial Officer.
As a reminder, our earnings release financial and operating information and the presentation slides are available on our Investor Relations website.
A replay and transcript of this call will also be made available on our website before we get started I'd like to draw your attention to our safe Harbor statement on slide two.
Information in this presentation contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties discussions.
Discussions of factors that may affect future results is contained in verizon's filings with the SEC, which are available on our website.
This presentation contains certain non-GAAP financial measures.
Reconciliations of these non-GAAP measures the most directly comparable GAAP measures are included in the financial materials posted on our website.
As a reminder, we are still in a quiet period for the $3 four or five gigahertz spectrum auction. So we will not be able to comment on our mid band spectrum holdings or strategy.
Now, let's take a look at consolidated earnings for the fourth quarter and full year.
In the fourth quarter, we reported earnings of $1 11 per share, resulting in full year earnings of $5 32 per share on a GAAP basis.
Reported fourth quarter earnings include a net pre tax loss from special items of approximately $1 2 billion.
This includes a charge of $2 4 billion for the early extinguishment of debt.
$806 million charge related to severance.
A $1 $2 billion credit pertaining to the annual mark to market for our pension and <unk> liabilities.
And a net gain of $131 million, primarily related to the disposition of an investment.
Excluding the effect of these special items adjusted earnings per share was $1 31 in the fourth quarter and $5 39 for the full year.
We completed the acquisition of Tracfone on November 23.
The revenue associated with Tracfone. This year was approximately $700 million higher than the revenue received from Tracfone in the fourth quarter of 2020.
All of this revenue flows through our consumer group.
As noted in our press release. This morning, beginning in 2022, our adjusted earnings per share will exclude amortization of acquisition related intangible assets.
For 2021, such intangible amortization negatively impacted adjusted earnings per share by approximately <unk> 11.
And for 2022, we anticipate the impact to be approximately 17 to 19.
Finally, we will be hosting our annual Investor day event on March 3rd in New York City, where our leadership team will provide further details on our company has exciting plans for this year and beyond.
With that I'll now turn the call over to Hans to take us through a recap of 2021.
Thank you, Brian and happy New year to all of you. This past week as being one of the best since I joined Verizon on January 19th we successfully launched <unk> Ultra wideband, <unk>, which will enable more americans than ever before to experience a transformative speed reliability and power of our multi purpose.
On the go in their home or for their business at.
Our work throughout 2021 brought us to this moment and I will spend this call discussing how we got there and how our accomplishment will accelerate our growth.
I want to thank our incredible team for all your hard work and dedication throughout 2021.
<unk> for our customers and our communities.
Never executed so well on so many strategic and operational objective as we did in 2021.
This was a catalyst do you have a variety of them.
Very proud of our work.
We have a clear and disciplined strategy.
On our multi purpose network, that's great economies of scale and new business models in an era, where broadband is essential to our customers and society.
Our results clearly confirm that our strategy is working and the 'twenty to 'twenty, one was a transformative year for Verizon and its clear sets us up for high impact year in 2022.
We have now assembled the industry's most comprehensive portfolio of high quality assets, leveraging our best in class technology to extend our network leadership to address more opportunities than anyone else in the market.
We're widely being recognized for both what we have accomplished and for the 20 <unk> time in a row J D power ranked Verizon first for network quality.
<unk> hundred 70, <unk> J D Power network quality award in 18 years at the same time, we continue to support our four stakeholders shareholders customers employees and society as a responsible business Verizon leads the industry and sustainability we're rank.
Ahead of our peers, both by the Drucker Institute and just hundreds and we are confident that our multi stakeholder strategy will lead to long term shareholder value.
We have a team and expertise to lead the country into a vibrant mobile computing future. Verizon has the best engineers in the word and they have built the world's foremost reliable and scalable network.
Asset is the foundation and catalyst for accelerating growth. So we begin 'twenty to 'twenty, two with a strong portfolio of assets.
We're executing our five year strategy, making great progress on our five vectors of growth and delivering a premier customer experience. This significant momentum sets us up for 'twenty to 'twenty, two and beyond let me give an update on our financial and operation metrics during 2020 ones first quarter.
We set clear targets.
After the close out 2021 and entering 2002 I am proud to report that we delivered on all of them plus some.
And our achievements will only capitalize even greater value creation in 2022 on our January 19 C band deployment, we covered more than 90 million Pops and millions of homes in more than 1700 cities well ahead of plan and are making excellent use of the incremental capital spend to augment.
Accelerate our business opportunities.
Today, we cover more than 95 million Pops as a team is progressing well it's abroad.
It seems thousand additional <unk> ultra wideband small cells in service exceeding our annual gold and nearly doubling our total five millimeter wave presence, increasing our fiber footprint to create a state of the art multi purpose network.
At our Investor Day last year, we said, we would have 5% to 10% traffic in urban areas covered by millimeter wave today, we're almost at 10% it's exceeding our expectation this confirms our millimeter wave strategy.
All this set stage for last week's Verizon Ultra wideband launch, we're excited and pleased with what we're seeing so far from customer reception to network performance.
We have grown our network significantly we finished 2021 with over 20 million households covered for our fixed wireless access solutions.
C band adds millions more homes.
Our business our initial <unk> expansion will cover more than $1 7 million organization with Verizon <unk> thesis Internet across 900 cities.
We will reach new retail and business clients by offering a breath of plan options that make our capability is relevant to their lives.
Our new mix and match photo offerings allow customers to pick the five year plan. They want with options for savings on home Internet for basis, we offer basis unlimited offerings that bring choice and power to the professional market.
In addition to our network achievements, we closed on two large strategic transactions in 2021 were sold Verizon Media group to Apollo Global management for $5 billion transaction that closed in September retaining minority ownership.
And in November we completed our strategic acquisition of Tracfone positioning Verizon as the number one provider within the value segment. These opportunities that enable us to deepen our relationship with new customers, while delivering more enhanced services.
Backbone is being rapidly integrate into our operation the acquisition added 20 million customers to a prepaid model and cement Verizon as a leading prepaid vendor at Walmart and best buy forming a strong foundation for our retail effort.
We also continue to reach new customers, who bundle internet telephone and television services fires in the net adds in 'twenty to 'twenty one were our best since 2014, and we continue to expand availability of the best in class service Importantly, we strengthened our relationship with our customers, adding more connections including more than.
Half a million new wireless postpaid phone net adds while maintaining a cultivating our loyal high quality relationships.
We provided additional value for our customers through our unique partnership strategy with the best brands that are meaningful to people lives and businesses. This includes content partnership with NFL Disney Apple Discovery and <unk> to name a few for business is we offer mobile edge compute capabilities Sunday were first in the world with <unk>.
Long as an industry leaders like AWS, Google and Microsoft.
Disruptions to consumer and industrial supply chain dropped 2021 and extending into this year have affected all industries and broad digital connectivity to the central focus in the lives of our stakeholders.
That said Verizon has executed effectively under these conditions as demonstrated by our successful network expansion and network service launches once again, our financial performance demonstrates that our strategy is working our focus on profitable volume continues to drive wireless service revenue growth of four 7% in 2021.
And in the fourth quarter, 74% of our customers subscribe to an unlimited plan compared to 71% in Q3, just over a third of our unlimited subscribers unlimited premium. This leaves room for continued step up expansion.
Multi purpose network and flexible plants will also encourage customers to upgrade handsets and devices. We saw quick adoption of <unk> handsets throughout 'twenty to 'twenty, one in anticipation of new services, one third of our customer's handsets are now enabled compared to about 25.
In the third quarter.
We raised our earnings per share in wireless service revenue guidance during the year and deliver on both including 10% EPS growth.
We promised also 10 billion in cost savings and we deliver ahead of schedule. However, we continuously strive to more efficiently manage our business.
We generated strong cash flows to support our investments and financial commitments and we delivered our 15th consecutive year of increased dividend payments, while maintaining a healthy balance sheet as.
That's where our focus on ESG <unk>. Verizon has also delivered on its promises we took action towards meeting our 2025 goals, including spending to support technology education and adoption to bridge, the digital divide and contracting for significant renewable energy capacity positioning the company to achieve over 50% renewal.
Energy goal by 2025.
Matt will elaborate on our performance and 2022 guidance in detail.
But we will target organic service and other revenue of around 3% as well as EBITDA growth of 2% to 3%.
With the right assets in place and a sound strategy to reach consumers and businesses with five new capabilities and mobile edge computing on a multi purpose network. Verizon has unlimited potential 2022 will demonstrate this now I will turn the call over to Matt to walk you through our fourth quarter and full year performance in greater detail.
Thank you Hans and good morning, everyone I am pleased to be with you today to share our fourth quarter and full year 2021 results, where we continued to deliver strong financial and operating performance.
Before I get into the 2021 results, let me add my own congratulations to the Verizon team for achieving a C band build targets well ahead of schedule and for the successful commercial launch last week. The C band deployment provides so many opportunities for us.
As Hans mentioned, our strategy is working and these results demonstrate our ability to compete effectively to drive new high quality customers to our platform. While also serving our best in class customer base.
We do this with the financial discipline.
Naples is to deliver attractive service revenue growth and profitability as evidenced by another strong earnings performance with healthy cash generation.
It starts with our award winning networks, which enable both our consumer and business organizations to deliver the best products services and experiences to customers with.
With the acquisition of Tracfone, the deployments of C band spectrum, you mix and match plans and the strongest and most innovative team in the industry 2022 is positioned to be our best year yet.
Let's take a look at these results beginning on slide six.
In the fourth quarter consolidated total revenue was $34 1 billion down.
<unk> down one 8% from the prior year adjusting for the sale of Verizon Media Group on September 1st consolidated revenue grew four 8% strong wireless service revenue growth in wireless equipment revenue were offset by continued declines in legacy wireline products.
Total wireless service revenue was up six 5% for the quarter.
The results were driven by a combination of ARPA and volume growth consistent with our strategy and the contribution from the Tracfone acquisition.
For the full year wireless service revenue grew four 7%, including Tracfone and was in line with the increased guidance. We provided at the end of the third quarter when adjusted for the track from an acquisition.
<unk> revenue was $3 2 billion and grew five 7% for the fourth quarter driven by strong customer demand for our high quality connectivity services.
Full year <unk> revenue was approximately $12 7 billion up four 6% over the prior year.
Service and other revenue grew two 6% in the fourth quarter, excluding the impact of the sale of Horizon media, while on a reported basis. It declined five 4% from the prior year.
Consolidated adjusted EBITDA in the fourth quarter was $11 8 billion relatively flat compared to last year as growth in consumer was offset by declines in business and the impact of the Verizon Media group sale.
Full year consolidated adjusted EBITDA totaled $48 4 billion up two 8% from the prior year.
Adjusted EBITDA margin was 36, 2% down 50 basis points, primarily due to higher equipment revenues.
Earlier in the year and ahead of schedule, we achieved our $10 billion business excellent cost savings go.
We continue to drive efficiency in the business, while operating with the best cost structure in the industry and expect strong operating leverage as we execute across all of our five axis of growth.
As Brady mentioned for the fourth quarter adjusted EPS was $1 31 up eight 3% year over year, demonstrating the strength of our business for the full year adjusted EPS of $5 39 was at the high end of our upwardly revised guidance range and is a 10% increase over 2020 results.
Now, let's take a look at our consolidated metrics.
The strength of our networks and brand combined with our effective go to market strategy of driving improved competitive performance in the market. We continue to expand our high quality mobility base with strong performance across consumer and business.
At the same time accelerating fixed wireless sales, a complement and strong <unk> results expanding our broadband growth opportunity.
For the quarter, we delivered 558000 wireless retail postpaid phone net adds an increase over the 279000 achieved during the same period last year.
Postpaid phone churn for the quarter was <unk> eight 1% roughly in line with the same period last year and better than pre pandemic levels, reflecting the enduring loyalty of our customer base through ordinary and extraordinary times.
Broadband net adds which includes consumer and business files DSL and fixed wireless totaled 106000 up 30000 from the prior year.
<unk> Internet net adds were 55000, another strong result.
Even with a slight uptick in involuntary churn we continue to experience exceptionally low fast internet churn as customers trust the reliability of our network and value the simplicity of our mix and match pricing.
Our full year Internet net adds of 360000 represented the best annual performance since 2014, and we now have $6 9 million Fios Internet customers.
Demand for our fixed wireless access services continued to grow even before our C band deployment.
<unk> net adds which include both consumer and business fixed wireless products totaled 78000 up from 55000 last quarter.
This brings our total <unk> customer base to approximately 223000 at the end of the year.
Now, let's turn to our consumer group results.
Fourth quarter represented another strong financial performance with consumer highlighted by our best fast revenue growth in the two dose error wireless service revenue momentum and healthy profitability.
We are clearly seeing the benefits of our focused go to market organization.
Consumer operating revenue for the fourth quarter was $25 7 billion up seven 4% year over year.
Service and other revenue of $19 4 billion was up five 2% versus the prior year due to strong wireless and fast revenue growth and a partial quarter contribution from tracfone.
As Brady mentioned, the net revenue changed from Tracfone was approximately $700 million in the quarter, which included incremental service revenue of approximately $500 million year over year.
For the full year total consumer revenue increased seven 6% from a year ago to $95 3 billion.
Service and other revenue rose three 4% to $75 5 billion.
Consumer wireless service revenue for the quarter Rose seven 7% to $14 6 billion.
Collecting ongoing step ups into unlimited and premium plans as well as the contribution from Tracfone.
Postpaid ARPA increased three 2% from the year ago period, driven by a higher premium unlimited mix and growth from products and services, such as content cloud and device protection plans.
For the full year consumer wireless service revenue was $56 1 billion up four 7% from 2020 levels.
Consumer fast revenue totaled $2 $9 billion for the fourth quarter up five 6% from the year ago period, driven primarily by the strong growth in our broadband base.
For the quarter EBITDA was $10 3 billion up.
Up four 1% year over year or more than $400 million driven.
Driven by the service revenue growth.
Margins were 43% down 120 basis points from last year due to higher equipment revenues associated with increased volumes.
For the full year EBITDA was $41 6 billion up approximately $1 4 billion, a three 4% versus the prior year.
Margins were 43, 7% down from 45, 5% the prior year as a result of the approximately 28% equipment revenue growth in the year.
Now, let's turn to slide nine to discuss our consumer operating metrics.
Our flexible mix and match plans are at the heart of our go to market strategy supporting continued strong demand for higher tier premium mobility and broadband offerings.
<unk> phone net adds were 336000 in the quarter. We competed effectively during the holiday season, even as the switcher pool remains soft compared to pre pandemic levels due to elevated retention promotions in the marketplace.
Fourth quarter phone gross adds up approximately 11% compared to the same period last year.
We're approximately 15% lower than the 2019 levels.
We continue to achieve strong customer retention with postpaid phone churn of <unk>, 77% for the fourth quarter relatively flat compared to the same period last year and well below pre pandemic levels, even as trading volumes pick back up.
We maintained the momentum of attracting high quality customers with approximately 60% of new accounts, taking a premium unlimited plan and over one third of our base accounts now on our premium unlimited tier.
<unk> penetration continued to expand with approximately 34% of our phone base now equipped with a <unk> capable device at year end.
We expect to drive further <unk> ultra wideband adoption with the launch last week about C band spectrum to more than 19 million pumps combined with our updated mix and match offerings introduced earlier this month.
With the close of the acquisition Tracfone results are now included in consumer prepaid. We finished the year as the nation's leading value segment provider with approximately 24 million total prepaid customers, including the approximately 20 million customers acquired from Tracfone.
For the quarter prepaid net customer losses totaled 85000, which included 52000 net losses on the Tracfone business is stemming from stronger demand for postpaid plans due to promos in that segment, coupled with handset supply constraint now, let's move to slide 10 to review the business group results.
Operating revenue for the business segment was $7 8 billion in the fourth quarter down 3.0% year over year.
We faced elevated pressures in the quarter and both public sector and wholesale and we expect these pressures to moderate in 2022.
Full year operating revenue was $31.0 billion up slightly year over year, driven by strong wireless performance.
Service revenue increased one 5% in wireless equipment revenue was up nine 6% in the fourth quarter.
Wireless service revenue was driven by growth in small and medium business and enterprise performance improved for the fourth consecutive quarter and was the highest growth since the start of the pandemic.
While this was partially offset by a decline in public sector due to the elevated distance learning activity in the year ago period, our horizon frontline campaign is resonating with stakeholders, helping drive new customer growth.
Wireline trends remained under pressure as we continue to face prior year comps that included pandemic buying in addition, approximately one third of our declines came from voice services, where we continue to feel the impact of our strategic initiative to exit the low margin International wholesale voice market business segment, EBITDA was $1 8 billion.
Down seven 4% from the same quarter last year.
Business segment EBITDA margin was 23, 5% in the quarter, reflecting pressure in legacy wireline products and our commitment to invest in new product growth and drive customer demand for our wireless solution.
Full year margins were 24, 2% down 120 basis points from last year.
We exited the year with strong momentum in business activity and demand for our wireless products with the recent launch of our C. Band spectrum. We are in an even better position to serve the <unk> needs of our business customers throughout 2022.
For the quarter phone gross adds were up approximately 22% year over year and 8% from four Q2 thousand 19 levels.
The fourth quarter represented the strongest quarterly phone gross adds performance for small and medium business and enterprise since launching horizon 2.0.
Segment postpaid phone churn was 1.0% to 1% in the quarter, which was up slightly over the prior year.
As a result total postpaid phone net adds with 222000.
Our best quarterly performance since the onset of the pandemic.
Now, let's move to our consolidated cash flow summary.
Cash generation remains strong for 2021, as we achieved our financial targets and executed on our capital allocation plan we.
We spent over $45 billion of C band spectrum and expanded our portfolio was attract phone acquisition, all while increasing our dividend for the 15th straight year, and making progress to maintain a healthy balance sheet.
The business continues to generate strong cash flow cash flow from operating activities totaled $39 $5 billion for the year.
Klein of $2 2 billion.
This result, primarily reflects strong performance in the business with increase adjusted EBITDA of $1 3 billion offset by higher working capital from device payment receivables and slightly higher cash taxes.
Capital spending in 2021 totaled $23 billion as we.
Tenured to support traffic growth on our <unk> LTE network, while initiating the first phase of C band deployment, COVID-19 million Pops.
Ban related Capex was approximately $2 1 billion in 2021.
As a result free cash flow for the full year was $19 3 billion down from $23 6 billion in 2020.
The highlights of our financing activity in 2021 was efficiently funding our C band spectrum investment in the first quarter.
Since then we have focused on further optimizing our cash position and debt maturity profile with activity to reduce our extent near term maturities, while deploying excess cash to retire longer dated high coupon bonds.
We accomplished this while maintaining ample flexibility to invest in our business such as funding the recent Tracfone acquisition.
We were also active with our ABS funding program the financing increased device payment receivables as consumers upgrade to <unk> phones.
We exited the year with $133 7 billion of net unsecured debt of $3 $7 billion reduction from the end of the first quarter.
Our unsecured debt to adjusted EBITDA ratio was approximately two eight times at year end in line with our 2021 Investor day guidance.
Our financing activities over the past two years have reduced our average portfolio borrowing costs by about 1% as compared to 2019, albeit with higher debt levels.
Our cash balance at the end of the year was $2 9 billion.
Down approximately $7.0 billion to $1 billion sequentially, bringing us back to normal levels.
Let's move on to slide 13 to discuss our outlook for 2022.
We have great momentum from the strong operating and financial results last year and are well positioned heading into the new year and that momentum is reflected in our guidance for 2022.
We took many strategic actions to position the company for better growth and our increased guidance disclosures to provide greater insight into our financial outlook.
At our Investor Day last year, we provided guidance of at least 3% service and other revenue for 2022 and 2023.
The 2022, we expect organic service and other revenue growth of around 3%.
On a reported basis, which includes the net impact of the sale of Verizon Media group and our ownership of Tracfone service and other revenue growth is expected to range between 1.0 and one 5%.
Similarly on a reported basis wireless service revenue growth of 2022 is expected to be in the range of 9% to 10% driven by growth from our tiered unlimited strategy the impact of the Tracfone acquisition and a ramping fixed wireless access contribution.
Excluding the impacts of the Tracfone acquisition wireless service revenue is expected to grow at least 3%.
We expect total adjusted EBITDA to grow 2% to 3% in 2022, driven by topline growth and ongoing cost discipline full year adjusted earnings per share is expected to be $5 40 to $5 55.
As the waterfall chart shows we expect adjusted EBITDA growth, including a small positive net contribution from the Tracfone and media transactions to be offset by headwinds from below the line items.
These items include approximately 15 cents from S C band investments, including higher depreciation and lower capitalized interest as we put the spectrum into service.
<unk> share dilution as a result of shares issued in the Tracfone acquisition and other noncash impacts such as DNA and pension and <unk> expense.
Our adjusted effective income tax rate is expected to be in the range of 23% to 25% based on current legislation.
Capital spending for the full year, excluding C band is expected to be between 16, 5% and $17 5 billion a decrease from the $18 2 billion in 2021, as we have started our progress towards lower capital intensity.
C band capital spend is anticipated to be between 5% to $6 billion.
As we continue to build out the initial markets and begin preparations are deploying phase two spectrum.
But 2022 cash flow from operations are expected to be driven by higher operating income offset by increased working capital from device payment receivables as well as higher cash taxes.
We are extremely excited for 2022 unexpected to pay our biggest year yet.
The second wave of <unk> here, and we are leading the way into the future of connectivity.
We have the necessary assets and strategy to unlock the full potential of our growth vectors.
With that I will hand, it over to Hans to discuss our 2022 strategic priorities. Thank.
Thank you Matt that assets are in place to make 'twenty to 'twenty two the <unk> best year yet.
Coming off of capital. This year, we are excited to execute on our <unk> growth and deliver the financial targets, we laid out at our Investor day back in March of last year.
We have clear priorities for the year we.
We will continue our legacy of disciplined execution and I look forward to delivering against our operation and financial targets that Matt just outlined.
We expect organic service and other revenue growth of around 3% in 'twenty to 'twenty two.
And we also expect to increase our beat up by two 3%.
We commit to strengthen and growing our core business.
Merchandising our unique asset.
By combining our Verizon Ultra wideband, we the new mix and match plans weekend supercharged <unk> ultra wideband adoption to enhance customer experiences and to increase average revenue per user.
At the same time.
We will continue to expand our fixed wireless access positioning Verizon as a premier nationwide broadband provider.
We believe that Verizon is fixed wireless access offering will drive the next leg of broadband growth, increasing our market share and reach.
We really innovate in our business, our business offerings, bringing mobile edge computing to Orient the prize clients and transform the internet of things from a vision to reality.
Should continue to expect us to sign new clients and provide examples on how the mobile edge compute is addressing the complex needs of our customers will benefit from our leading position in the value segment. The integration on Tracfone will form the basis of deep and productive relationships that can grow.
To meet our customers' changing needs throughout life.
We will continue to run Verizon as a purpose driven organization.
We will pursue C band and fight the leadership because these technologies are critical for economic prosperity and driving innovation for all not just for Verizon.
We will continue to serve all of our stakeholders shareholders customers employees and society.
And lastly, I also hope to see you all again at our upcoming Investor Day on March the third with that I hand, it back to Brady.
Thank you Hans Brad we're now ready to take questions.
Thank you.
We will now begin the question and answer session.
I would like to ask a question. Please press star one please on mute your phone and record your name clearly when prompted your name is required to introduce your question to.
To withdraw your request please press two.
One moment for our first question.
Your first question comes from Brett Feldman of Goldman Sachs. Your line is open Sir.
Thanks for taking the question with regard to the guidance you've given for about 3% growth in service and other revenue very similar to your growth targets with just straight up wireless service revenue could you give us a little more insight as to what you anticipate to be the principal drivers in other words to what extent is this.
Continuing to see people upgrading to higher tier plans mean, it's very much an archived driven story and are we getting to a point, where you're expecting a more material contribution from some of the emerging growth opportunities, whether it's fixed wireless.
<unk> mobile edge compute and then just one more sort of follow up there on broadband now that we're starting to see the fixed wireless net adds begin to ramp should we expect that they're going to be the dominant driver of your aggregate broadband net ads going forward and could you give us some insight as to where those customers are coming from in other words, I think primarily ryzen mobile customers, taking a bundle.
You actually reaching a new demographic. Thank you.
Okay. Thank you Bret let me start and I.
Additions on that when it comes to the growth in 'twenty two first of all of them I think.
We're coming in with a great momentum from 'twenty to 'twenty, one bolt in our business and our consumer.
Units both of them have done a great job at the end of last year at pulping that of course with the C band and the ones, which we're very excited about and ER and we see a very very good performance only done with our new offerings. Both on the beach decided on a consumer side with mix and match and all of that that all create of course for us.
We feel is a great momentum coming into this year round and we also have the step ups and as you heard me in my math walking in all we see even though we all continue to step up our customer we even have more to do there and we have a couple of years of more growth coming from that ARPA expansion, so coming into the year and we feel really good about the momentum.
And we have but also about the opportunity in the market on the wireless market.
That will come back but on the broadband piece just quickly then.
We of course are very excited over the <unk> broadband.
We saw last year was the best year since 2014 will continue to expand their footprint in.
They have such a good performance on it and customers love It and then on top of that as I said fixed wireless access is now coming into a totally different model. We have it onboard you have doesn't really meet the way, but none of course, Tony on the C. Band earlier. This month he used to open up new opportunities, but also of course, we want to see fixed wireless.
Access continue to grow for us and there's a super focus for the team.
And you asked what would it cost them at constant first of all all the fixed wireless customers will have they use these as a primary broadband solution for them that that's very important because that we see on the usage on them. So it is no backup for secondary lines on fixed wireless access is the primary broadband usage.
And secondly, these customers are coming from basically a cable and DSL areas, where they are using that but that's what it would take them from.
<unk>.
They are new to us as broadband customers and sometimes they're new they're not even wireless customers. So that's why we get them from right now so I think that that's our sweet spot right now when we're not.
Our broadband provider so all in all excited over getting into trying to do with all the assets. We have right now and what their thoughts are with all of that coming together. So early in the year for us with the C band.
Yeah. Thanks, Brad Good morning, So just a couple of follow ups on the service and other revenue. So certainly we're excited about all the new opportunities ahead of us.
Such as fixed wireless as Hans mentioned.
And the other five growth factors, but as you think about 2022.
That organic approximately 3% will largely be driven by the momentum we saw coming out of last year.
On the business side very strong volumes in the second half of the year in SMB and global enterprise that gives us a great platform to build on I would expect the wireless service revenue growth in the BG.
To be above the four 8% they did last year at or above that number. So we'll see the benefit of the strong second half coming through in our in V. B G. There on the consumer side as Hans mentioned, we we have approximately 30% of our.
Of our customers with on a premium unlimited here.
So we have the opportunity to step more customers up and with the new plans, we announced earlier. This month, we give customers an even bigger reasons for stepping up to those premium tier so that would be the major drivers of the growth during the year when you get into the second half of the year start to see fixed wireless, especially.
M Starr as that base grows will start to contribute there but.
But really built on the great momentum, we have coupled with our activities over the past few weeks gives us a lot of excitement as we think about 'twenty two.
Thank you yeah, Thanks, Brett Brad we're ready for the next question.
The next question comes from Phil Cusick of Jpmorgan. Your line is open.
Hi, Thank you.
Maybe first a follow up on your subscriber momentum comments it seems like the industry in the fourth quarter slowed from seasonally from the pace earlier in the year and you are typically much lower in the first quarter any reason to think that isn't the case this year.
And then second.
The majority of the C band deployment looks like it can be done this year and is it fair to assume the remaining two to 3 billion happens to the 2023 I think Matt Your comment was that Capex is beginning to come down.
On an ex <unk> basis should we assume that that next year might be even below this year sort of 17 billion. Thank you.
Thank you on that.
The competitive environment.
Yeah, we saw that in the fourth quarter and we when.
When we are saying that we have the guidance for 2010 view, we continue to believe it's going to be competitive, but we have great assets and of course, what is different in the first quarter. This year from any other year.
She is of course called a five year ultra wide band and C band and that's the Big difference. We are really excited over that the announcement and as you saw we now cover more than 95 million Pops, and we have great offerings, both for our business customers.
And for our our consumers.
And then topping that fixed wireless access and mobility Gainesville and later on we can come to talk about mobile edge compute because he's also augment potentially and in the mobile edge compute.
Before I left.
Comment on the Capex.
I just want to say, what I said at the Investor Day last year, we're going to we're going to see over the air right now that our capital intensity going down and partly with what you're seeing in the U S guidance with you right now.
We have done all fiber for a couple of years back down the majority of the long haul so to say and we also see that with the.
E expansion on C band, we clearly see over time, an offset on the <unk> that we can reduce on that and muscle that Verizon intelligent edge network that there is commonality from the data center to the edge that also has been ongoing for a while so that's why we are feeling good about to be are you coming down and then on the on the C band.
You're absolutely right 10 billion is the amount, we decided and we told Carlos and team. They spend the faster you can because we want this asset up and running as soon as possible and that's what you see the five to six right now and we did do last year. So that's where the normal calculation that is roughly two left in the in the year to come but when.
So future guidance on Capex I think we'll have to wait with that but clearly our target is to continue to be very capital efficient all.
All the time here, Matt Yeah, No I'd just reiterate a couple of his comments I mean, absolutely the we're sticking with the.
The $10 billion of incremental are very pleased with the the aggressive pace that collyn team of being able to adopt their which.
Which means that we see those.
You know what we did last year plus five to six ish year leaves a fairly small amount to come through in 2023 after that.
C band.
<unk> thought about the Capex.
Capex number.
As we add capacity to the network.
As Hans mentioned, we've we've discussed for a while now the opportunities to see capital intensity come down.
We're starting to see those come through.
They were really accelerate really on the back end of 'twenty, three but just one additional item in there.
On the one fiber build we've been doing at the end of 2021.
We reached a point, where we had just over 50% of the market, where we have completed the core network build so theres only success base.
Network taking place.
And those are 50% of the market over the course of the next.
A couple of years.
We'll completely complete the KOL build across all one fiber market. So you have that you have the reduction in LTE spend.
Five G starts to replace it in terms of carrying large amounts of capacity Hans mentioned in his prepared remarks, how much of the capacity of millimeter wave has really started to pick up as well and you can see there's a number of reasons why we feel good about capital intensity.
Going forward here.
On the <unk> so.
We will we will be in a great place going forward as you look at the spend for last year on C band to one that's obviously on a on.
On a cash basis on an incurred basis, you know the activity.
If I remember in December a large part of that will show up as Capex in the first quarter here, we pay for those items. So.
Really strong momentum.
In terms of what the network team was doing last year. This flywheel.
Is running at full speed now on the C band build and you see that with the activity of this month so far.
If I can follow up on something you you mentioned I was thinking about anyway.
You said is C band becomes available you have a lot of capacity and does that change. The way you go to market Verizon hasn't been tight on capacity, but it hasn't been an excess position in a long time.
And now you have all the C band capacity does that change your desire to go to go chase market share.
I think this is sort of that full distracted on Verizon and coming together well.
We envision and some of them. So you will see in a conference room and in New York 118, and talking about Verizon intelligent edge network. How we wanted to build up in order to serve a market where capacity and connectivity needed all across the network for all type of customers and clear that the C. Band is just adding an enormous lot of capacity.
For us, but don't forget the millimeter wave now women that Rhapsody is really working for us as well because we take a lot of the high volume areas with millimeter wave, which unleash all of the spectrum and hey, we havent, even starting to do a carrier aggregation and using parts of our all of our spectrum yet coming into <unk>. So.
I would say it clearly we will be more aggressive on the especially on fixed wireless access because we feel so good about the capacity management and we have the best engineers in the industry. They have never failed strategy puts up so I feel really good about the capacity. We can go wherever we want.
Me and my own the two Ceos of our units going hard on all of the product in all angles of older networks. So yeah, I think we feel really good about our capacity is right now and what the team is doing is just amazing.
Thanks Bill.
Brad we're ready for the next question.
The next question comes from John Hodulik of UBS. Your line is open Sir.
Great. Thanks, and good morning, guys.
Continuing on the C band first of all I guess for Hans.
I'd say, we've got the issues with the FAA behind that and is there any sort of visibility on on getting that debt.
The affected spectrum.
Up and running and into production and I guess a follow on to that does that have any impact on your business.
Thus far in the year and then I guess following up on Phil's question, I mean with the additional <unk> band capacity should.
Should we expect sort of.
More immediate change in trends either on the on the mobile or fixed side and I guess from an incremental standpoint.
You really see a bigger change on the fixed side.
How do you expect those those net adds to ramp you saw a nice sequential ramp in fixed wireless net adds.
So going from the third quarter and fourth quarter should we expect that to continue.
Dan It gets rolled out and your and your processes get better and better.
And at what point do you get to a sort of a normalized run rate of fixed wireless sub growth. Thanks.
First of all on the as you heard our deployment on C. Band has been extremely successful basically deliver a quarter ahead than the guys has brought up so much sites are just amazing.
You know also that voluntary we agreed to it to not turn on some.
Some portion of all of the sites close to the airport, which is a smaller portion of the totality.
I would say theres good progress everybody's focus we have the highest assurance from the White house that this will be we will be resold.
Very soon.
All of these person myself, but again, it's a smaller portion of the network. The big thing is starting to impact our business at the moment, meaning our customers ever conserved, but clearly we won't be resold as soon as possible. So the pressure is on everybody moves to make these big.
When it comes to fixed wireless access.
Yeah Youre right.
We have now for a couple of years learned all the way from billing customer care, how to work with fixed wireless access and I think that's a really good way for us to learn going into the second.
Or into 'twenty two when it comes to fixed wireless access. So of course, we have high ambitious internally for fixed wireless access and the team is really well prepared for it.
Okay. Thanks, Tom.
Thanks, Brad we're ready for the next question.
The next question comes from Simon Flannery of Morgan Stanley . Your line is open great.
Great. Thank you very much good morning, I was wondering if you could update us on the Tracfone integration. What are you seeing so far and what are the opportunities in 'twenty, two and beyond particularly the synergy realization how does that flow into 2022, and then on the EBITDA I know, Matt you mentioned the $10 billion program and we continue to look at productivity, but how are you.
Thinking about inflation, presumably in retail stores et cetera.
Some wage inflation, but how are you thinking overall about the ability to hold costs down in this sort of environment. Thanks.
Okay, I'll just need to correct myself. He is growing so fast so I said 90 million Pops covered with C. Band. We're at 95 as I said as of today. So I just wanted to correct that my colleagues here.
I didn't remember that that is growing fast for us here, hey on Tracfone when he talked about the.
The integration as we took you saw Randall do remember the team is doing a great job together, what we are doing from the Verizon side is of course, bringing our platform the network the product the <unk>.
Experience in IP and all of that that's what they're bringing that bring synergies.
Of course, we're going to have these brands serving their marketing their weight and seeing that we coexist together with them. So that is really what is bringing out some investments in the beginning as Ware said, that's all the time and this would be really good addition to us and it will be incremental from the beginning so I'm I'm I'm really excited what tracfone because now we serve.
Full market and being number one in that segment as well. So it just they seem to do overall thinking about the five vectors of growth, having more places to grow our than anybody else in the market and this is just another vector for us.
Matt this.
Simon on your question around the inflation.
You mentioned, we are successfully completed.
Our cost reduction program by the end of the first quarter three quarters ahead of target that.
That really puts us in a great place as you think about inflation, because we haven't stopped how work on continuing to get more efficient just because we hit the target, but it really gotten that muscle develops and the teams continue to look at ways to improve our processes make them more efficient and also improve both the customer and <unk>.
Employee experience so.
The teams have to.
Our continued strong targets in that space as we head into 2022, we all know inflation is out there and certainly we will see some of that the good news is that we have.
Good part of our cost base is tied to longer term contracts, which means we're not necessarily going to see the full impact of.
Inflation and at the same pace that other industries are seeing but certainly it's real we'll take actions to address that the guidance that we gave was based off our expectation for.
To see an uptick in inflation this year and there is a number I believe as we have if.
We can pull if the situation evolves.
Thank you okay, great. Thanks, Simon Brad we're ready for the next question.
Next question comes from David Barden of Bank of America. Your line is open Sir.
Thanks, guys for taking my question I wanted to first question wanted to follow up.
That's not on Tracfone.
It doesn't really give me three phases right, there's going to be the getting the handset costs you know.
Into the hands of the non Verizon wholesale customers and then the second is going to be realizing the margin benefit from migrating those guys onto the network and then the third piece is going to be kind of grooming those customers from the prepaid base into the postpaid and so I was wondering if you could kind of.
Agree or disagree with that you can kind of give a timetable where we could start to maybe see those tailwind in margins in postpaid phone nets emerge I think the second.
Question I wanted to ask was just.
The sixth floor as access becomes.
A bigger.
Input to <unk>.
Table thinking about the competitive interaction between telco and cable and it's not fixed wireless access is only at its fiber investments, they're also kind of putting a pincer movement on them.
And given the maturity of the wireless business now which has had.
Extraordinary low churn for a long time, now youre getting kind of into year four.
I think we just saw Comcast activity do you start to offer $400 retention initiatives temperature level.
The cable versus wireless in particular.
We are concerned could you kind of maybe give us your thoughts on how that's going to evolve and is it going to evolve in a rational way or do we need to be concerned.
I thought with a second question on that.
We'll go through a little bit on Tracfone.
Yeah on the market as I've said before I mean, we we we we compete well in a in a competitive market.
We prepare ourselves for that.
We think our offerings, both on wireless and fixed wireless access including fires of course is very strong ultimately we have a different recipe and the many others. The best network than we have all our partnerships.
Partnerships that nobody else have and finally, we have a great value proposition to our customer with mix and match, where they can pick and choose so that's why we feel really good going into this year end and with everything we've been doing the last couple of years. We know is working our strategy is working here and there and clearly we have also the owner's economics on both.
Wireless and broadband.
As different from anybody else basically that we actually have these only because we have built a network from the data center to the edge with commonality. The same type of equipment and then at the edge, we decided what type of access points, depending on customer and solution and then we gave them different applications.
Those with Disney plus whatever or if there are other solution and I think that's unique for US we have created that the last three years and that's why we sit here right now I'm feeling we're going to compete well in this market, even though it's competitively.
Yeah, Hey, Dave on track, So I think as you've as you walk through the things you described that certainly over the course of the next 12 to 24 months, we will have the ability to bring.
Bring all of the Tracfone base onto the.
Horizon network and those customers get that step up in performance that you.
You would expect when they come over so as you recall roughly two thirds of the track base was already on the Verizon network. So the alpha.
But we'll get migrated there.
Final piece, you mentioned was about once you've migrated the move a.
The ability to step them up to postpaid and looks at those customers that.
Want to step up to postpaid will be in a great position to do so.
With as Hans mentioned, the mix and match structure, given the customers' options as they move over to postpaid, but the the Tracfone acquisition wasn't based on bringing the ability to move more people over to postpaid we want to have the best prepaid propositions in the marketplace.
We can complement what was already in place with the owner's economics, we have and so we are in best position today, but customers that wanted to stay on prepaid we're going to have the best office for those that want to move to postpaid we can do that too.
Just very excited about the opportunities that we now have with the full ownership of the Tracfone brand.
Got it okay. Thanks, guys, yeah, Thanks, Dave Brad ready for the next question.
The next question comes from Michael Rollins of Citi. Your line is open.
Thanks, and good morning, I wanted to go back to a topic earlier in the discussion about what's embedded into 'twenty two guidance typically what's the expectation for wireless postpaid industry phone growth in 'twenty, two and how that compares to 21 and how important is the industry.
The growth in 'twenty two in terms of volume.
Verizon to hit the financial objectives that are set and then just separately Hans you made a mention of the macro mobile edge compute earlier and just curious if there's any update to unpack the financial opportunities and contributions.
From that arena for Verizon.
I thought with the Mac mobile edge compute no as you have seen we have a great progress on that first of all where three different thesis cases on the same infrastructure again, whether they're private mobile edge compute.
Public mobile edge compute and wed probably five day network. That's what we're working on right now and are there a little bit different use cases of course of all of them. Some are a little bit more b to b to C and some aren't really beat the beat at what.
What we are doing right now is of course, bringing all that to live together with our partner. So I'm gonna have the three largest web scale players in the industry and working with US on all of these and suddenly we start seeing with every announcement that you see in the market. If these Iot solutions net diverse solution.
Basketball, we built the network and mobile edge compute so this year I'm looking for taking many of our proof of concept together with large enterprises and the application of <unk>.
<unk> to two commercial deals.
If you would put that in timing I would say the fixed wireless access is a little bit earlier as I said, all the time and it won't be the case as personal five D. Then fixed wireless access and we talked a lot about that and then mobile edge compute so you're going to see more about gaining and winning a lot of business is because we are the only one in the market the mobile edge compute so that's what you're going to see in in 'twenty two.
And then of course, we're going to build up our revenue base going into 'twenty three.
Yeah, Hey, Mike on your first question around the guidance on the revenue so specifically.
Specifically as you know from a volume standpoint, when I looked at the.
The business segment, we saw very strong performance by that group in the second half of the year. We're excited about the momentum they have we assumed that they will continue to perform.
<unk> strongly from that standpoint into 2022 and as you heard.
Earlier expect them too.
<unk> be at least at the service revenue growth from 'twenty, one or above so.
That will be driven by continued.
Strength in SMB and global Enterprise and then on the consumer side, we assume that the switcher pool will continue to be constrained based off the activity in the marketplace.
We will continue to be very strong in terms of customer retention and we have the opportunity to step customers up.
And we you saw us do that last year and now we have the additional opportunities that come with that with the new mix and match plans on C band.
So we have great opportunity there, but as I say, we assume the switcher pool will continue to be.
You know continue to show some limitations just because of some of the other activity out there, but even with that we think will have some very strong service revenue growth next year and then we bring fixed wireless access on top of that as you think about getting into the back end of the year and subsequent period. So very excited about the momentum that we see.
From a revenue standpoint.
Yep, Thanks, Mike Brad we're ready for the next question the.
The next question comes from Colby <unk> of Cowen Your line is open.
Great. Thanks, It's Greg Williams sitting in for Colby two questions. If I may one is on your 2022 free cash flow I realize youre not guiding to it but with ebay guiding up 2% to 3% and Capex call. It $22 5 billion at the midpoint.
Free cash flow coming in around $20 to 21 billion, obviously, the big bogey here is capex to the range it could be up to $2 billion.
Dan can you help us at the proper framework on the free cash flow stood out in 'twenty two the puts and takes the working capital you mentioned working capital drag on <unk> phone.
<unk> and <unk>.
Pension and how we should think about it and then the second question just on rising rate.
With the expectations of the 10 year eclipsing 2%.
Rising rates change your view on capital allocation and your leverage targets. Thanks.
Yeah. So thanks for the questions Greg So on the free cash flow for 2022.
It starts with a strong cash generation from the business with the you know the EBITDA and you saw the EBITDA guide plus 2% to 3%.
Driven from growth of the topline that puts us in a good place, but I do expect we'll see working capital increase next year as we continue to support our customer activity, especially related to the device payment plans.
So as revenues and profitability increases cash taxes have a nasty habit of increasing as well so that will of course be in the C. F. F O and then as you get down to free cash flow as you mentioned.
The Capex will play and that we said last year, we'd spend that incremental 10 billion over three years, we're going to see the biggest part of that come through this year, but you're also seeing.
The rest of the Capex number being lower year over year.
Range of 16 to 17, the half versus $18 2 billion, we've done not just last year, but the last two years. So.
So you'll see that come through.
And really kind of linking that with the second question, but what you really see is our ability.
To execute across all parts of the capital allocation model invest in the business with the not just the buying the spectrum.
Accelerating the deployment of it.
<unk> track phone at the same time.
Increasing the dividend for the 15th year in a row are continuing to strengthen the balance sheet. We said at the Investor day last year and our leverage ratio would be about two nine times at the end of the first quarter with all the financing for the spectrum and we'd be at two eight times by the end of the year, we hit that target do you see already coming down while.
Doing that additional spend.
We are certainly excited about the opportunities with the cash generation of the business give us and then as you think about rising rates the team's done a great job of maximizing the debt portfolio you see that in the interest expense. The majority of our debt is fixed rate.
So it would take a interest rate being at elevated levels for sick for a long time period.
For that to flow through into our debt complex.
So I think the way that we're managing.
The debt profile it means that the the higher rate environment will not cause us to change how we think about capital allocation model here.
And certainly we're focused on continuing to execute aggressively against all of the pillars of the model.
Yeah. Thank you yeah, Thanks, Greg Brad we're ready for the next question.
The next question comes from Craig Moffett of Moffett Nathan.
Your line is open.
Hi, yes. Thank you I want to return to some of the comments you made about fixed wireless how should we think about fixed wireless is it.
Primarily an opportunity to generate revenue on the <unk> platform, because it's available or is it primarily.
Play towards convergence and selling a bundle of of wireless and home access across across not just your wireline footprint, but across the whole country.
On that latter point, how do you how do you envision the sale of.
<unk> do you expect that.
Converged offering to household is going to become the norm for the industry.
Thank you for the question.
First of all I think what we have designed this network and our go to market is optionality for our customers. If the market goes to more converged, yes, definitely we will be there we're going to be nationwide with broadband and we're gonna be nationwide with violet, you've just standalone basis, we can do that as well because we have the scale right now all the way from our network to our.
Capacity to our IP to our go to market customer care all the way we have scale and so we're just playing with the.
When the market is going and giving the optionality. The same goes for our content deals I'm trying to see that our customers can pick and choose what they want and see if they want it they can't keep it or they they they can continue with it so all in all with our mix and match on network everything is set up for Optionality of a customer choice.
We are the company can't gives a customer choice and then when the economies of scale in either older solution. So if the market glaucoma, just we're gonna be there if it goes that Brett we're gonna be there and we're gonna have economies of scales of both of them and it will increase our leverage when it comes to our profitability because it's one network as one.
Way to go to the market for us regardless of.
Yeah. Thank you yeah. Thanks, Craig.
Brad we're ready for the next question.
The next question is from Peter Zaffino of Bernstein. Your line is open.
Hi, Thank you two questions if I could Matt I'd love to hear a bit more about the 2020 guidance for organic service revenue growth of 3% relative to EBITDA growing just a little bit slower I'm wondering where the de leverages in the model for 2022, and when you might expect to see the.
<unk> leverage.
But you mentioned in your prepared remarks, and then Hans just to follow up on <unk>.
Craig's question about fixed wireless access.
You're in the last year using <unk> broadly.
And then providing 50% off a fixed wireless access.
For Verizon premium unnoticed.
Because it seems like your marketing is behaving in a way that is very focused on driving bundling ratios I'm wondering if you think.
That's the right interpretation of it is when might you be more focused on pricing in the broadband business.
They paid us so I'll start off with the <unk> taken a look at your question around the 'twenty two guidance. So certainly expect wireless service revenue to have another good year start.
Starting with the momentum we have coming out of 21, both in business and in consumer and then we add obviously to that bringing tracfone in and also with the C band and the new mix and match pricing. So feel good there we would expect in the legacy wireline business to see.
The.
Some of the secular trends that we've been experiencing for a number of years now continue provide.
Providing an offset and then you see the impact of that also as you think about the profitability, but certainly.
The 2% to 3% on EBITDA. We think is a shows that the business continues to grow continues to increase the cash generation and as we bring C band online and execute across all five vectors of growth we.
We have opportunities to see that margin line expand even further in subsequent years as we go here so the margin growth and cash flow growth across the business should continue to be strong not just in 'twenty, two but for a number of years out.
So you want to yes.
Yeah, I will answer on the fixed wireless access first of all I think we have not changed our long term strategy will be to be financial discipline. When it comes about customer acquisitions. We are focused on high quality customers. We will continue to do so our team is extremely methodical when it comes to do these offerings and see the long term.
The benefit for us and for the customer and what we gave them as I said you know right now our fixed wireless access we will.
Have these bundled to see what the market wants to have but again, we have optionality with the pricing we can do it standalone and we can do it together with a premium on wireless and I think all in all again, we have owner's economics on both of them. So it should be possible financing for us.
Again, the team is very convinced that we have a really really good.
For him and I hear and I.
All the cold pronouncing my consumer team, but don't forget the business, even the business team is doing fixed wireless access as well and theyre doing mobility as well and they have a great opportunity again, we use our platforms. The long term strategy of putting in order to be using the same type of solutions to our customer base on that weekend.
And that's why we can't do the guidance, we do right now for 'twenty, two I'm feeling good about it.
Yeah. Thanks, Peter Thank you very much Brad we have time for one last question.
Thank you. Your final question for today will come from Ken brand of Oppenheimer. Your line is open Sir.
Thanks, guys can we talk about the C band goes up a little bit more.
The $10 billion in total spend will you have basically all your cell sites.
With that has done well all the spectrum be online I guess, that's the same question for the 95 million Pops do you have most of the cell sites built in those locations and maybe what percentage of the spectrum is online and then.
Can you give us an idea now that you're operating in what the increase in overall capacity is as latency maybe other other measures would be helpful.
And I'll, let Matt Matt to start with.
Got the way any questions that's on Manhattan, So hey, Tim so on the.
On the C band build so look certainly we are not complete with a coverage from a build standpoint with the initial 10 billion.
10 billion as incremental as I said once we've spent the 10.
Ongoing C band Bill becomes part of that be a you capex and you heard our comments earlier around expectation for continued improved capital intensity.
So, but certainly within the you know the $10 billion is helping us build out significant parts of the first 46 markets. The ones, we got access to and turned on last week and also begin the early build in the other market that are scheduled to be turned on.
In December of 'twenty, three so we'll get a substantial part of the coverage for C band built with the 10 billion certainly not the whole thing, but then as we do that traffic moves off of the LTE networks to our need to continue to spend on capacity in the LTE network comes down that's how we'll continue.
To fund the C band build going forward.
As a result of those other efficiencies so hopefully that provides a little more detail.
No no.
And I would do is.
Of course at the when it comes to these initial build them in the the vast vast minority eastern sides are already have we haven't had it before it's the same green <unk>, which is a great great processing all I'll do this and then we'll have normal expenses all the time, but that's.
That's nothing unusual to see a U.
When it comes to the performance or the C. Band. This is a perfect total cliffhanger.
But earlier of course, we're excited we're excited about you know we have our Investor day third over March and I think that they've been doing in there you'll probably get something about the performance on our C band, but there are early into it I'm really pleased with the technology team of Dawn and our partners have done so far but stay.
Stay tuned for third of March and then we'll talk more about that yeah.
Yeah. Thanks, Tim that's a great way to end Brad that's all the time, we have today.
Ladies and gentlemen, this does conclude the conference call for today. Thank you for your participation and for using Verizon Conference services you may now disconnect.
[music].
[music].
[music].