Q2 2023 Verizon Communications Inc Earnings Call
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Speaker 1: I.
It is now my pleasure to turn the call over to your host Mr. Brady Connor Senior Vice President Investor Relations. Thanks.
Thanks, Brad Good morning, everyone and welcome to our second quarter earnings Conference call I'm, Brady Connor and I'm joined by our Chairman and Chief Executive Officer, Hans Vestberg as well as our Chief Financial Officer, Tony Schiavo.
Speaker 2: Good morning and welcome to the Verizon second quarter 2023 earnings conference call. At this time all participants have been placed in a listen only mode and the floor will be opened for questions following the presentation. To ask a question press star 1 on your touch tone phone.
Before we begin I'd like to draw your attention to our safe Harbor statement, which can be found on slide two of the presentation.
Information in this presentation contains statements about expected future events and financial results that are forward looking and subject to risks and uncertainties discussions of factors that may affect future results is contained in Verizon filings with the SEC, which are available on our website.
Speaker 2: If at any point your question has been answered, you may remove yourself by pressing star 2.
Speaker 2: Today's conference is being recorded. If you have any objections, you may disconnect at this time. It is now my pleasure to turn the call over to your host, Mr. Brady Conner, Senior Vice President, Investor Relations.
This presentation contains certain non-GAAP financial measures reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the financial materials posted on our website.
Speaker 3: Thanks Brad. Good morning everyone and welcome to our second quarter earnings conference call. I'm Brady Connor and I'm joined by our Chairman and Chief Executive Officer Hans Vestberg as well as our Chief Financial Officer Tony Schiatis.
Earlier. This morning, we posted to our Investor Relations website, a detailed review of our second quarter results you will find additional detail in the earnings materials on our Investor Relations website with that I'll now turn the call over to Hans.
Speaker 3: Before we begin, I'd like to draw your attention to our Safe Harbor statement, which can be found on slide 2 of the presentation.
Thank you, Brian and good morning, everyone and welcome to our second quarter earnings call Me and my team are pleased to report another solid quarter as we continued to advance across all of our strategic key performance indicators, our newly appointed leadership team remains committed to delivering on our key metrics growth.
Speaker 3: Information in this presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties.
Speaker 3: Discussions of factors that may affect future results is contained in Verizon's filings with the FCC, which are available on our website. This presentation contains certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the financial materials.
Our wireless service revenue and expansion on consolidated adjusted EBITDA and free cash flow, we're seeing operational improvements throughout our business and our results are strong.
Speaker 3: posted on our website.
Speaker 3: Earlier this morning, we posted to our investor relations website a detailed review of our second quarter results. You will find additional detail in the earnings materials on our investor relations website. With that, I'll now turn the call over to Hans.
Wireless service revenue was up three 8% year over year and adjusted EBITDA was $12 billion for the quarter cash flow from operation was very strong in the quarter at $9 $7 billion and free cash flow was $5 $6 billion. The actions, we're taking the actions.
Speaker 4: Thank you Brady and good morning everyone and welcome to our second quarter earnings call. Me and my team are pleased to report another solid quarter as we continue to advance across all of our strategic key performance indicators. Our newly appointed leadership team remains committed to delivering on our key metrics.
<unk> growth improve operations and ensure a solid balance sheet or working on.
Our results today illustrate our ability to adapt innovate and <unk>, even in times of economic uncertainty and we're encouraged by the growing importance all mobility broadband and cloud services in the <unk> era in all customer segments.
Speaker 4: growth on wireless service revenue, and expansion on consolidated adjusted EBITDA and free cash flow. We're seeing operational improvements throughout our business, and our results are strong.
Based on our results this quarter and what we see ahead I am confident that we will deliver on our 'twenty to 'twenty three financial guidance. This is a testament to the hard work and dedication of our team now let's look more closely at the performance in mobility private networks and National broadband Arkansas.
Speaker 4: Wine and service revenue was up 3.8% year over year and adjusted EBITDA was $12 billion for the quarter. Cash flow from operation was very strong in the quarter at $9.7 billion and free cash flow was $5.6 billion.
Our consumer wireless strategy of segmentation and financial discipline is paying off this quarter, we saw a year over year growth in postpaid phone gross adds significantly lower promo upgrade levels and a sequential improvement in postpaid churn all according to our strategy. This work is a continue.
Speaker 4: The actions we are taking to accelerate growth, improve operations and ensure solid balance sheets are working.
Speaker 4: Our results today illustrate our ability to adapt, innovate, and excel even in times of economic uncertainty, and we are encouraged by the growing importance of mobility, broadband, and cloud services in the 5G era in all customer segments.
Newest process and we're always looking for ways to do better in May we launched my plan a first of its kind customized offering that gives our customers the value control and simplicity. They want this aligns with our strategy to bring our customers the best value on Americas.
Speaker 4: Based on our results this quarter and what we see ahead, I'm confident that we will deliver on our 2023 financial guidance. This is a testament to the hard work and dedication of our team. Now let's look more closely at the performance in mobility, private networks and national abroad then.
Best Network one.
While we're still in early days My plan has already to help our Verizon consumer group delivered notable operational improvements by encouraging customers to take on premium plans, which is driving higher ARPA.
Speaker 4: Our consumer wireless strategy of segmentation and financial discipline is paying off. This quarter we saw a year-over-year growth in post-paid phone gross ads, significantly lower promo upgrade levels, and a sequential improvement in post-paid churn. All according to our strategy.
We're really excited for what's to come from new platform for sending consumer wireless services and we're constantly evolving our offerings to fit customers' needs. We will also continue to invest in prepaid to improve performance and expect sequential improvements in the second half of the year as we reported in <unk>.
Speaker 4: This work is a continuous process and we're always looking for ways to do better.
Speaker 4: In May, we launched MyPlan, a first-of-its-kind, customized offering that gives our customers the value, control, and simplicity they want. This alliance will extract it of bringing our customers the best value on America's best network.
This quarter's customer payments remain healthy, which shows both the financial strength, our customer base and the high value. They place on our services are ongoing and effective strategy execution by Sam Pat and the consumer team support a stronger Verizon where we are the premium.
Speaker 4: Why are we still on early days? My plan has already helped our Verizon consumer group deliver notable operational improvements by encouraging customers to take on premium plans, which is driving higher order.
Provider with elements like the new mine plan strategic regionalization persistent cost transformation and reinforced focus on customer satisfaction.
Speaker 4: We're really excited for what's to come from our new platform for sending consumer wireless services and we're constantly evolving our offerings to fit customers' needs.
We're strengthening our operational blueprint.
With a local emphasis and effectively positioning ourselves for sustainable growth.
Speaker 4: We will also continue to invest in prepaid to improve performance and expect sequential improvements in the second half of the year. As we reported in previous quarters, customer payments remain healthy.
Verizon business group had yet another strong quarter, driven by continued solid phone and fixed wireless access performance, even as the secular decline in wireline continues for the eighth quarter in a row Verizon business contributed more than 125000 postpaid phone net adds demonstrating.
Speaker 4: which shows both the financial strength of our customer base and the high value they place on our services.
Speaker 4: Our ongoing and effective strategy execution by Sampat and the consumer team supports a strong overrides on where we are the premium provider with elements like the new My plan, strategic regionalization, persistent cost transformation and the reinforced focus on customer satisfaction.
The resiliency of our service offering to all types of businesses and the value of our World Class network.
<unk> networks, we won the mandate from the U S Department of Veterans Affairs, and we recently completed work to launch our next generation private networking solution at the Cleveland clinic that will support their mission for years to come as a trusted partner to enterprise businesses and federal government, we work closely to transform the network.
Speaker 4: We are strengthening our operational blueprint.
Speaker 4: with a local emphasis and effectively positioning ourselves for sustainable growth.
Speaker 4: Verizon Business Group had yet another strong quarter driven by continued solid phone and fixed wireless access performance even after secular decline in wireless continues.
And bring organizations on the leading edge of technology development.
Total addressable market of private wireless is expected to grow significantly and Verizon is well positioned to capture a meaningful share.
Speaker 4: For the eighth quarter in a row Verizon Business contributed more than 125,000 postpaid phone net ads demonstrating the resiliency of our service offering to all types of businesses and the value of our world-class network. On private networks we won a mandate from the US Department of Veterans Affairs.
Our broadband strategy to deliver more than 400000 net adds in the quarter on files and fixed wireless access marking another quarter of remarkable broadband performance. This represents the third consecutive quarter with more than 400000 net ads demonstrating the momentum of our growth trajectory.
Speaker 4: and we recently completed work to launch a next generation private networking solution at the Cleveland Clinic that will support their mission for years to come.
We have established a high pace of customer growth, it's clear fixed wireless access is here to stay as a proven competitive broadband product, we're well on track to meet our target of four to 5 million fixed wireless access subscribers by the end of 2025 from our current base of nearly two.
Speaker 4: As a trusted partner to enterprise businesses and federal government, we were closely to transform the networks and bring organizations onto the leading edge of technology development. The total address of a market of private wireless is expected to grow significantly.
Two 3 million subscribers. We also now have an opportunity to segment the fixed wireless access market based on price and speed tiers. So that our customers can choose to service that best suit them. Further we continue to see net promoter scores of fires and fixed wireless access that's significantly exceed that.
Speaker 4: And Verizon is well positioned to capture meaningful shares.
Speaker 4: Our broadest strategy is to deliver more than 400,000 net ads in the quarter on FIOS and fixed-wise access. Marking another quarter of remark to a broadband performance. This represents the third consecutive quarter with more than 400,000 net ads, demonstrating the momentum of our growth trajectory. We have established a high-paced of customer growth.
Traditional cable offerings.
We have the best network in the market in the next couple of quarters, we will extend our lead with a last chance or the C band spectrum.
Speaker 4: It's clear, fixed wise access is here to stay as a proven competitive broadband product. We're well on track to meet our target of 4-5 million fixed wise access subscribers by the end of 2025, from a current base of nearly 2.3 million subscribers. We also now have an opportunity.
For the 31st time in a row Verizon was the most awarded brand for wireless network quality in J D. Power's U S. Wireless network quality study no. Other wireless provider has achieved this and were 23, we received top scores among all J D. Power's start it factors in all six.
Speaker 4: to segment the fixed wireless access market based on price and speed tiers, so that our customers can choose the service that best suits them.
Additionally, our team continues to innovate within our network.
Grading our infrastructure around the country and successfully testing our ability to slides RFID network slicing will allow us to serve customers with dedicated 50 service on a large scale and to meet the diverse needs of the largest base of wireless customers in the United States.
Speaker 4: Further, we continue to see net promoters scores of files and fixed wise access that significantly exceed those of traditional cable offerings.
Speaker 4: We have the best network in the market and the next couple of quarters, we will extend our lead with a large chance of the CBAN spectrum.
Nick I want to address the recent news about the legacy led cabling our network, we take these matters seriously and to be very clear.
Speaker 4: For the 31st time in a row, the rise on what the most awarded brand for wireless network quality in JD powers, US wireless network quality started. No other wireless provider has achieved this, and for 203 we received top scores among all JD power start defectors in all six regions.
The infrastructure makes up a small percentage of our copper network and we began facing away from installing new led cable by the 19 fifties.
At Verizon and the communities, we serve and our employees are at the heart of everything we do and we're using a fact and science based approach in our assessment you will hear more on the topic from Tony later on.
Speaker 4: Additionally, our team continues to innovate within our network, upgrading our infrastructure around the country and successfully testing our ability to slice our 5G network. Slicing will allow us to serve customers with dedicated 5G service on a large scale and to meet the diverse needs of the largest base of wireless customers.
Our accelerated plans for efficiency with our new structure, which we put in place over the last couple of quarters are already paying off Verizon Global services has taken action on a number of opportunities companywide, realizing significant savings by focusing on IP platform transformation leveraging our.
Sufficient intelligence rationalizing, our real estate portfolio and improving our supply chains, we're on track to achieve our forecasted due to $3 billion in annual savings by 2025. These savings in combination with the completion of the $10 billion C band spend position us to generate.
Speaker 4: and we began facing away from installing new lead cables by the 1950s. At Verizon, the communities we serve and our employees are at the heart of everything we do and we're using a fact and science-based approach in our assessment.
Strong cash flow and continue to invest in our business and pursue dividend increases and as we execute on our capital allocation strategy now I will turn the call over to Tony to discuss our operations and financial performance in more detail.
Speaker 4: You will hear more on the topic from Tony later on.
Speaker 4: Our accelerated plans for efficiency with our new structure which we put in place over the last couple of quarters are already paying off. Verizon Global Services has taken action on a number of opportunities companywide realizing significant savings by focusing on IT platform transformation leveraging automation and
Thanks, Hans and good morning, all.
Our results for the second quarter demonstrate our progress towards our three priorities of growing wireless service revenue delivering healthy consolidated adjusted EBITDA and increasing free cash flow our focus on execution is working and we remain on track to meet our financial guidance for 2023.
We are happy with our progress, but we have more work to do we are focused on continuing to improve our performance while remaining financially disciplined.
Speaker 4: $10 billion C-Banspen, position us to generate strong cash flow and continue to invest in our business and pursue dividend increases as we execute on our capital allocation strategy.
In the second quarter, our consumer segment demonstrated better operating results, both sequentially and year over year and postpaid phone net adds. Additionally.
Additionally, we experienced continued strong performance within our business segment, both in terms of mobility and SWA subscriber growth.
Speaker 4: Now, I will turn the call over to Tony to discuss our operations and financial performance in more detail. Thanks, Hans, and good morning. Our results for the second quarter demonstrate our progress towards our three priorities of growing wireless service revenue, delivering healthy, consolidated adjusted EBITDA and increasing free cash flow.
The results reflect the benefits of our ongoing C band deployment and improved go to market execution consumer postpaid phone net losses totaled 136000 for the quarter compared to 215000 net losses in the second quarter of 2022 consumer postpaid phone gross adds were strong once again up six.
Speaker 3: Our focus on execution is working and we remain on track to meet our financial guidance for 2023. We are happy with our progress, but we have more work to do. We are focused on continuing to improve our performance while remaining financially disciplined.
9% year over year, driven by new to Verizon gross ads, which increased approximately 19% over the prior year period.
Speaker 3: In the second quarter, our consumer segment demonstrated better operating results both sequentially and year over year in post-paid phone ads.
We also saw notable growth in consumer postpaid ARPA, which is up six 2% year over year.
The recent launch of my plan reflects a more segmented and targeted approach.
Speaker 3: Additionally, we experience continued strong performance within our business segment, both in terms of mobility and FWA subscriber growth.
While it's still early my plan is driving a significantly higher premium mix with nearly 70% of my plan customers, taking the unlimited plus option.
Speaker 3: The results reflect the benefits of our ongoing C-band deployment and improved go-to-market execution. Consumer post-paid phone net losses totaled $136,000 for the quarter, compared to $215,000 net losses in the second quarter of 2022. Consumer post-paid phone gross ads were strong once again.
We are also encouraged by the step activity we are seeing.
Consumer postpaid phone churn for the quarter was <unk>, 76% up one basis point compared with the same period last year.
Higher involuntary churn drove the year over year increase offsetting a modest improvement in voluntary churn.
Speaker 3: up 6.9% year over year driven by new to Verizon gross ads, which increased approximately 19% over the prior year period.
Our involuntary churn rates remained at pre pandemic levels and were flat for the third consecutive quarter.
Speaker 3: We also saw notable growth in consumer postpaid ARPA, which is up 6.2% year over year.
It is important to note our performance in existing C band markets.
And the 46 markets, where we initially deployed C band postpaid phone gross add growth was more than 100 basis points higher in the quarter that are non C band markets.
The recent launch of my plan reflects a more segmented and targeted approach. While it's still early, my plan is driving a significantly higher premium mix with nearly 70% of my plan customers taking the unlimited plus option.
Additionally, phone churn was four basis points lower in C band markets, and our premium mix and C band markets was 11 percentage points higher.
We are also encouraged by the step activity we are seeing.
Consumer postpaid phone chair for the quarter was 0.76% up one basis point compared with the same period last year.
Now look at our business results.
Ryzen business once again deliver solid performance and continues to expand on its industry, leading wireless market share.
Higher involuntary charge drove the year over your increase of setting a modest improvement in voluntary charge.
Demand continues to be strong in all three customer groups, resulting in 144000 phone net adds for the second quarter compared to 227000 for the same period last year, which benefited from some large deals.
Our involuntary churn rates remain at pre-pandemic levels and we're flat the third consecutive quarter.
It is important to note our performance in existing C band markets.
As Hans mentioned this marks the eighth consecutive quarter, where we have delivered over 125000 business phone net adds.
In the 46 markets where we initially deployed C-Ban, post-paid phone growth sag growth was more than 100 basis points higher in the quarter than in non-C-Ban markets.
We continue to win high value business based on the strength of our network performance and value proposition.
Additionally, phone churn was four basis points lower in C band markets and our premium mix in C band markets was 11 percentage points higher.
Notably we had our recent government contract win where we took share from two of our competitors at attractive <unk>.
Let's now look at our business results.
Moving on to broadband we maintain our strong performance with 418000 total broadband net additions in the second quarter.
Verizon Business once again delivers solid performance and continues to expand on its industry leading wireless market share.
In the past four quarters, we've added more than $1 6 million broadband subscribers growing our total broadband subscriber base by more than 21% during that time.
The man continues to be strong in all three customer groups, resulting in 144,000 phone net ads for the second quarter, compared to 227,000 for the same period last year, which benefited from some large deals. The man continues to be strong in all three customer groups, resulting in 144,000 phone net ads for the same period last year, which benefited from some large deals.
And <unk> remained healthy with 384000 net adds up from 256000 in the prior year period.
As Hans mentioned, this marks the eighth consecutive quarter where we have delivered over 125,000 business phone that adds.
We now have nearly $2 3 million customers on our <unk> product and we expect growth to continue at a fairly similar pace in the third quarter on the fire side Internet net adds for the second quarter were 54000 up from 36000 in the second quarter of last year.
We continue to win high-value business based on the strength of our network performance and value proposition.
Notably, we had a recent government contract win where we took share from two of our competitors at Attractive ARPOOS.
<unk> continued softness in household move activity gross adds rose year over year, and our retention levels continue to be strong our.
Moving on to broadband, we maintain our strong performance with 418,000 total broadband net additions in the second quarter.
Our value market team continues to take steps to address some of the softness we saw in the first half of the year pre.
In the past four quarters, we've added more than 1.6 million broadband subscribers, growing our total broadband subscriber base by more than 21% during that time.
Prepaid net losses totaled 304000 in the second quarter.
Our year to date net add performance should represent a low point as we continue to make progress integrating tracfone, while taking actions to better position us for growth, including scaling our visible and total by Verizon brands.
Growth and FWA remained healthy with 384,000 net ads up from 256,000 in the prior year period.
We now have nearly 2.3 million customers on our FWA product and we expect growth to continue at a fairly similar pace in the third quarter. On the Fioside, Internet Net Ads for the second quarter were 54,000, up from 36,000 to the second quarter of last year.
As Hans mentioned, we expect to see sequential improvements beginning in the third quarter.
Let's now look at our financials, starting with consolidated revenue for the quarter, which was $32 $6 billion down three 5% year over year.
Despite continued softness and household move activity, gross ads rose year over year, and our retention levels continue to be strong.
The decline can be attributed to reduced wireless equipment revenue, which was nearly 21% lower than the prior year as postpaid phone upgrade activity declined 34% versus the same period last year service and other revenue grew <unk>, 8% driven by wireless service revenue growth.
Our value market team continues to take steps to address some of the softness we saw in the first half of the year. Prepaid MetLoss is total 304,000 in the second quarter.
Our U2DAT Net Ad Performance should represent the low point as we continue to make progress integrating track phone while taking actions to better position us for growth, including scaling our visible and total bivorize and brands.
Total wireless service revenue was $19 1 billion up.
Up three 8% year over year and more than $200 million sequentially in the second quarter, we continued to benefit from pricing actions, including a recent change to our Verizon mobile protect offering.
As Hans mentioned, we expect to see sequential improvements beginning in the third quarter. Let's now look at our financial starting with Consolidator Revenue for the Quarter, which was $32.6 billion down 3.5% year over year.
Additionally, the larger allocation of our administrative and telco recovery fees from other revenue into wireless service revenue and growth in fixed wireless access drove revenue improvements.
The decline can be attributed to reduced wireless equipment revenue, which was nearly 21% lower than the prior year, as post-paid phone upgrade activity declined 34% versus the same period last year. Service at other revenue grew 0.8% driven by wireless service revenue growth.
These benefits were partially offset by continued pressure from the amortization of handset promotions we.
We are on track to deliver our wireless service revenue guidance for the year.
We continue to assess opportunities to take targeted pricing actions to better monetize our products and services as we deliver great value for our customers. For example, we recently announced an increase in our SWA bundled pricing for new customers, which we expect will provide service revenue benefits in the second half of the year.
Total wireless service revenue was $19.1 billion, up 3.8% year-or-year, and more than $200 million sequentially. In the second quarter, we continue to benefit from pricing actions, including a recent change to our Verizon mobile protect offering.
Additionally, we expect less pressure from the amortization of promotional cost in the second half of the year, given the softer upgrade environment and our disciplined approach to promotional spending.
Additionally, the larger allocation of our administrative and telco recovery fees from other revenue into wireless service revenue and growth and fixed wireless access to our revenue improvements.
Consolidated adjusted EBITDA in the quarter was $12 billion.
0.8% compared to the prior year.
These benefits were partially offset by continued pressure from the amortization of hands at promotions.
Adjusted EBITDA margin improved by 160 basis points over the prior year, primarily driven by lower consumer postpaid upgrade volumes and improve service revenue. These benefits were partially offset by higher marketing expenses in the quarter related to the my plan launch as well as a $194 million increase in bad debt year over year.
We are on track to deliver our wireless service revenue guidance for the year.
We continue to assess opportunities to take targeted pricing actions to better monetize our products and services as we deliver great value for our customers.
For example, we recently announced an increase in our FWA bundle pricing for new customers, which we expect will provide service revenue benefits in the second half of the year.
Bad debt was relatively flat from the prior quarter and payment trends remain consistent with recent quarters and pre pandemic levels operating expenses, excluding depreciation and amortization and special items were down five 9% year over year, primarily due to the lower cost of equipment from reduced upgrade volumes at <unk>.
Additionally, we expect less pressure from the amortization of promotional costs in the second half of the year, given the softer upgrade environment and our disciplined approach to promotional spending.
Consolidated adjusted EBITDA in the quarter was $12 billion of 0.8% compared to the prior year.
Hans mentioned, we continued to execute on our cost savings program, including through initiatives within our Verizon Global services organization.
Adjusted EBITDA margin improved by 160 basis points over the prior year, primarily driven by lower consumer postpaid upgrade volumes and improved service revenue. These benefits were partially offset by higher marketing expenses in the quarter related to the MyPlan launch, as well as a $194 million increase in bad debt year over year.
During the quarter, we took actions to rationalize our workforce as we continue to see benefits from rationalizing certain legacy wireline products.
We are on track to deliver $200 million to $300 million of savings. This year from our transformation efforts and continue to make progress towards achieving our goal of $2 billion to $3 billion of annual cost savings by 2025.
Bad debt was relatively flat from the prior quarter and payment trends remained consistent with recent quarters and pre-pandemic levels. Operating expenses, excluding depreciation and amortization and special items were down 5.9% year over year, primarily due to the lower cost of equipment from reduced upgrade volumes.
Cash flow from operating activities for the second quarter was $9 $7 billion and for the first half of the year totaled $18 billion compared to $17 7 billion in the prior year period.
The increase continues to be related to working capital improvements associated with lower inventory levels and fewer upgrades, which were offset in part by higher cash income taxes and interest expense.
As Hans mentioned, we continue to execute on our cost savings program, including through initiatives within our Verizon Global Services organization.
During the quarter, we took actions to rationalize our workforce as we continue to see benefits from rationalizing certain legacy wireline products.
Capex for the quarter came in at $4 1 billion, which reflects the completion of our $10 billion accelerated C band program capital spending for the first half of the year totaled $10 1 billion, which was over $400 million less than last year.
We are on track to deliver 200 to 300 million dollars of savings this year from our transformation efforts and continue to make progress towards achieving our goal of $2 to $3 billion of annual cost savings by 2025.
We continue to expect 2023 capital spending to be within our guidance of $18, two 5% to $19 $5 billion.
Cash flow from operating activities for the second quarter was $9.7 billion, and for the first half of the year totaled $18 billion, compared to $17.7 billion in the prior year period.
Our peak capital spend is behind US and we are now at a business as usual run rate for Capex, which we expect will continue into 2024.
The net result of cash flow from operations and capital spending is free cash flow for the quarter of $5 6 billion.
The increase continues to be related to working capital improvements associated with lower inventory levels and fewer upgrades, which were offset in part by higher cash income taxes and interest expense.
Free cash flow for the first half of the year is $8 billion.
And nearly $800 million improvement from the previous year, driven by a combination of a lower capex spend compared to the prior year and operating cash flow benefits previously mentioned.
Caffex for the quarter came at a $4.1 billion, which reflects the completion of our $10 billion accelerated C-BAM program. Capital spending for the first half of the year total $10.1 billion, which was over $400 million less than last year.
While we do not normally guide on free cash flow are strong results give us a clear line of sight to more than $17 billion of free cash flow for the full year net unsecured debt at the end of the quarter was $126 6 billion, an improvement of $3 2 billion compared to the end of the previous quarter and $4 $1 billion lower.
We continue to expect 2023 capital spending to be within our guidance of 18.25 to 19.25 billion dollars.
Our peak capital spend is behind us, and we are now at our businesses usual run rate for catbacks, which we expect will continue into 2024.
Year over year, we ended the quarter with $4 8 billion of cash on hand, we are well positioned with respect to our unsecured debt maturities with no remaining obligations for the rest of the year.
The net result of cash flow from operations and capital spending is free cash flow for the quarter of $5.6 billion.
Precashflow for the first half of the year is $8 billion, and nearly $800 billion improvement from the previous year, driven by a combination of our lower cap X spend, compared to the prior year, and operating cashflow benefits previously mentioned.
Our net unsecured debt to consolidated adjusted EBITDA ratio was two six times as of the end of the second quarter of 0.1 time improvement both sequentially and year over year. We continue to monitor the current interest rate environment closely given recent comments from the federal reserve on planned rate increases later in the year as pre.
While we do not normally guide on free cash flow, our strong results give us a clear line of sight to more than $17 billion of free cash flow for the full year. Net unsecured debt at the end of the quarter was $126.6 billion in improvement of $3.2 billion compared to the end of the previous quarter and $4.1 billion lower year over year.
Obviously stated we expect higher interest expense the impact of full year earnings per share by <unk> 25 to 30.
And there's no change to that view.
Our strong second quarter results support our capital allocation priorities, which remain unchanged.
We ended the quarter with $4.8 billion of cash on hand. We are well positioned with respect to our unsecured debt maturities with no remaining obligations for the rest of the year.
Before I hand, the call back to Hans I would like to address the recent media reports on lead sheet cables in our network.
Here is what we currently know we.
Our net unsecured debt to consolidated adjusted EBITDA ratio was 2.6 times as of the end of the second quarter, a 0.1 time improvement both sequentially and year over year. We continue to monitor the current interest rate environment closely given recent comments from the Federal Reserve on planned rate increases later in the year. As previously stated, we expect higher interest expense to impact our full year earnings per share.
We still have some legacy led chief cable and our copper network.
As a result of the age of this infrastructure and the history of the industry records or incomplete as to exactly how much of the cable around network has led sheathing.
However to give you a sense of the scale of the infrastructure. We are talking about our copper network is comprised of less than 540000 miles of cable roughly half of which is Ariel and led chief cable. It makes up a small percentage of our copper network. This number excludes the network elements previously owned by Mci.
Our strong second quarter results support our capital allocation priorities which remain unchanged.
And XO communications, because we are still reviewing the historical records of those companies were not disturb the likelihood of exposure to lead from led chief cables is low.
Before I hand the call back to Hans, I'd like to address the recent media reports on led sheet cables in our network.
I have a call back to Hans. I'd like to address the recent media reports on lead sheath cables in our network. Here is what we currently know.
We still have some legacy led chief cable in our copper network. As a result of the age of this infrastructure and the history of the industry, records are incomplete as to exactly how much of the cable out of a network has led sheathing.
In addition, because the less sheet cable was used as a feeder and distribution cable and does not run into individual homes or apartments. It is generally in locations that minimize the potential for public contact.
However, to give you a sense of the scale of the infrastructure we are talking about, our copper network is comprised of less than 540,000 miles of cable, roughly half of which is aerial, and led chief cable makes up a small percentage of our copper network. This number excludes the network elements previously owned by MCI and exo communications.
We are working with a third party expert to conduct our own testing at our sites that were identified by the media.
We will not have the results of our testing for several weeks when we have the results of our testing we will work closely with our industry and others to address any concerns and issues.
Now I think it's important to address a question. We have received from a lot of investors, which is about the process for and potential cost of removal of the led chief cable and our network given where we are in this process. It is far too soon to make any projections on what the potential financial impact might be to the company.
because we are still reviewing the historical records of those companies. When not disturbed, the likelihood of exposure to lead from lead sheath cables is low.
In addition, because the less sheath cable was used as a feeder and distribution cable and does not run into individual homes or apartments, it is generally in locations that minimize the potential for public contact.
There are a number of unknowns in this area, including whether there is a health risk presented by undisturbed led chief cable and if there is a risk how that risk should be addressed.
We are working with a third party expert to conduct our own testing at our sites that were identified by the media.
As a result, we did I believe there is a meaningful way to estimate any potential cost to the company or that any such estimate would even be useful.
We will not have the results of our testing for several weeks.
When we have the results of our testing, we will work closely with our industry and others to address any concerns and issues.
We won't be able to provide any additional color during the Q&A session. As we have more information we can share on the topic. We will certainly do that I will now turn the call back to Hans for his closing thoughts before we open it up to your questions.
Now, I think it's important to address the question we've received from a lot of investors, which is about the process for a potential cost of removal of the lead chief cable in our network. Given where we are in this process, it is far too soon to make any projection on what the potential financial impact might be to the company. There are a number of unknowns in this area, including whether there is a health risk presented by undisturbed
Thank you Tony as we pass the midpoint of 2023 I'm pleased by how we're effectively deliver on our priorities and I'm confident that we will meet the financial goals, we set for ourselves for the full year.
To summarize in mobility are segmented and disciplined approach to the market is working.
And our efforts to improve the consumer groups performance will continue throughout the second half of the year.
As a result, we did not believe there's a meaningful way to estimate any potential cost to the company or that any such estimate would even be useful. We won't be able to provide any additional color during the Q&A session. As we have more information, we can share on the topic. We will certainly do that. I will now turn the call back to Hans for his closing thoughts before he open it up to your questions. Thank you, Tony. As we pass the midpoint, though, 2020, I'm pleased by how we're effectively delivering our priorities. And I'm confident that we will meet the financial goals we set for ourselves for the full year.
In broadband <unk>.
Combination of fixed wireless access and fiber is winning as we capitalize on the unique strength and capabilities of both technologies.
We continue to have the best network in the market and our leadership position will only get stronger as we continue to rollout seaborne.
While we're encouraged by the quarter's result, theres more work to be done my leadership team and I are laser focused on delivering what we committed to you of top of the year strong wireless service revenue EBITDA and free cash flow as well as meeting our 2003 financial guidance by that.
And our efforts to improve the consumer groups' performance will continue throughout the second half of the year. In broadband, the combination of fixed-wise access and fiber is winning as we capitalize on the unique strength and capabilities of both technologies. We continue to have the best network in the market.
I'll hand, it over to Randy for questions. Okay.
Thanks, Hans Brad we're ready to take the first question.
Thank you.
We will now begin the question and answer session. If you would like to ask a question. Please press star one please on mute your phone and record your name clearly when prompted.
<unk> is required to introduce your question.
To withdraw your request please press star two.
And our leadership position will only get stronger as we continue to roll out Sivan.?? her staying healthy, pourrait cleansing the? x audi Cyrus Helm.
One moment for our first question.
And our first question will come from John Hodulik of UBS. Your line is open Sir.
While we're encouraged by the court's results, there's more work to be done. My leadership team and I are laser focused on delivering what we committed to you at top of the year. Strong wireless service revenue, Ibita and free cash flow, as well as meeting our 203 financial guidance. By that, I hand it over to Brady for questions. Okay.
Great. Thanks, Good morning, guys.
Let's take a nice beat on the <unk>.
Tumor side really driven by the postpaid ARPA growth of about 6% could you guys sort of pull that apart a little bit maybe talk about the sustainability of that in the service revenue growth you saw as we head into the second half I mean, I think you've got some you'll lap some price increases, but you've got some other price increases coming through in some of the promotional stuff rolling off and.
Then maybe just quickly on the led obviously you guys can't quantify it but when you guys say low single low exposure of the 540000 miles on copper is that that single digit can you can you guys tighten up that number for us a little bit that'd be great. Thanks.
Thank you John let me start with the service revenue.
We have been extremely focused on the service revenue last year.
This quarter, we are expanding the growth from the first quarter.
But as many components I understand you want to know a little bit more about the or by expansion, but you.
We definitely see the broadband is adding to our growth and then of course our wireless.
Business side is doing extremely well, that's why eliminate towards more of a 125000.
100000, so we are actually doing a lot of things in different areas. But then if you go to the consumer group. They have been really good the last couple of quarters right now to be segmenting targeting the right the right offering with the right pricing for the customers and my plan has been playing very well to that then is your tone and talking about 70% of <unk>.
So, but that's just the start of it we were not down, but clearly I am confident that our team knows how to manage these given how much we invested in research on the consumer side on the Samsung our consumers better and Thats why we are.
<unk> launched my plan so.
All in all I have to say that the guys are doing well I'm confident that we will continue on these stride, but maybe Tony can give you some more on that and then we can come back to the lead yes, Thanks, Todd and good morning, John So on the service revenue, we're very confident in the guide you mentioned tough comps that we face in the second half when you think about the second half of the year, Let me unpack.
Some of the drivers for you as you know we executed a number of targeted pricing actions between the price ups on the legacy unlimited plans that we did earlier in the quarter as well as most recently changes to our handset insurance program and price changes on FWS bundles.
Secondly, we had the introduction of my plan back in May that's helped with premium mix and you heard that we're roughly 70% taking the unlimited plus plan.
As mentioned, we see an increase in contribution from fixed wireless access we have $2 3 million subs in the base and we have great momentum on the <unk>.
And then fourth we see continued improvements in year over year consumer postpaid volumes and you saw that in the quarter and then lastly, when you think about the promo amortization the revenue impact from promotions and the promo amortization has decelerated in recent quarters and that is it's basically a function of our disciplined approach to.
Motions and retention. So when you put that altogether, we're very confident that all of the initiatives here will continue to drive meaningful revenue growth in the second half.
On the lead.
As I said, we take this matter very seriously and we're doing exactly what you expect from Verizon We're doing this scientific in fact base well as Tony said, we're going.
Or did the the different places that have been pointed out by media and doing our own measurements with internal and external experts and Thats, where we are and we will do this very thorough.
We are always doing things its oral with you and fact based scientific and that's how we're going to do and that's what you should expect from us.
Yes.
Thanks for that John we're still reviewing the records and we mentioned that we're still reviewing the historical records as a former Mci and XO network. So that work is still ongoing as well. So we still have more work to do work to do there and as we learn more we'll keep you updated.
Okay, great. Thank you, yes, thanks, John Brad we're ready for the next question.
The next question comes from Brett Feldman of Goldman Sachs. Your line is open Sir.
Thanks for taking the question and I think I'll follow up on consumer volumes, you alluded to and responding to John It was great to see you consumer phone losses improved year over year, but I know your ambition is to do better than that how do you think about.
Getting back to net growth in consumer postpaid phones.
Youre going to need to take further actions in terms of the product mix or pricing or even any additional internal adjustments or do you think you have the places and pieces in place and it's really just a matter of driving better execution against that framework. Thank you.
I think it's about our execution on the framework, where it builds right now the guys have everything sand patented team together, we told in me with the full support revenue platform and my plan, whereas segmented them off the market, we work with financial discipline. The target we'll have our teams continue to do sequential growth and that's a good call.
And sample the team said before are we.
We ultimately we want our fair share also on the net adds but ultimately we measure ourself on service revenue growth and as you can see we continue to improve that so it's more about now executing on this being patient and see that both the network is the best in the market, but it's just improving and some of the numbers that Tony talked about you see.
The impact when the C band is coming out and the under my plan, you'll see also see that this now.
Usually what we have talked about these actually giving us really good confidence that we're on the right place. So all that is in place and then we do the right read.
The organization is one of the same time, so a lot of things. He is in place it's more about the execution and doing it with the financial discipline that you should expect from their iPhone.
And how do we think about the timeline for getting to sustainably positive.
Net adds in consumer or is that something that would be a reasonable expectation. Once you have C band fully deployed.
Yes, Hi, Brett it's Tony so.
Volumes are important to the business and as we said before we're going to be very disciplined on how we approach the market. Our focus is on volumes that drive profitable revenue growth. It's too soon to call third quarter positive for consumer, but as we've said, we expect improvement improvements year over year and consumer net adds and the team in San patent the team are very focused on that.
Thank you.
Yes.
Brad we're ready for the next question.
The next question comes from Simon Flannery of Morgan Stanley . Your line is open Sir.
Thank you very much good morning, I wanted to come back to the second phase of C. Band was helpful to get those statistics could you just help us a little bit more in terms of what this is going to mean in terms of your footprint both on the wireless side and on the fixed wireless side. How do we think that's going to help both coverage and also capacity I know theres concerns and some <unk>.
So about fixed wireless facing congestion it would be great too.
Let us know what your experience has been with usage and how you feel good about handling that $4 million to $5 million and beyond over the next few years and then maybe a quick one for Tony obviously, the stock has been under some pressure here.
Thank you.
Yes.
Brad we're ready for the next question.
The next question comes from Simon Flannery of Morgan Stanley . Your line is open Sir.
High yield.
Perhaps remind us about how youre thinking about potentially going to buybacks youre seeing some deleveraging now strong free cash flow.
Thank you very much good morning, I wanted to come back to the second phase of C. Band. It was helpful to get those statistics could you just help us a little bit more in terms of what this is going to mean in terms of your footprint both on the wireless side and on the fixed wireless side, how do we think that's going to help both.
It's going to be an option here.
Not too distinct future. Thank you.
Thank you Simon when it comes to the seaborne I said, we're ahead of the plan.
As soon as we get told on the next tranche of spectrum. The team is ready to continue to to deploy that that's going to give us both more capacity, but of course more coverage as well. So it gave us bolt on as you have seen the numbers we're talking about here.
And also capacity I know theres concerns in some quarters about fixed wireless facing congestion it would be great too.
Let us know what your experience has been with usage and how you feel good about handling that $4 million to $5 million and beyond over the next few years and then maybe a quick one for Tony obviously, the stock has been under some pressure here pretty high yield.
As soon as we deploy our C band, we get better uptake from our wireless customers and of course, we'll open up fixed wireless access would that should be possible over time for us and when it comes to these lingering question about capacity, we don't have any capacity problems. I mean, the guys are doing an enormous a good job at all the ways when it comes to Verizon.
Perhaps remind us about how you're thinking about potentially going to buybacks youre seeing some deleveraging now strong free cash flow is.
Is that going to be an option here.
Not too distant future. Thank you.
Thank you Simon when it comes to the seaborne I've said, we're ahead of the plan.
And capacity network planning, Joe and the team are on it all the time and seeing that we're doing the right for our customers and remember we are building a multi purpose.
As soon as we get told though the next tranche of spectrum. The team is ready to continue to to deploy that that's going to give us both more capacity, but of course more coverage as well. So it gave us bolt on as you have seen the numbers we talk about here.
Network that means that we.
We have one radio that serve multiple opportunities wireless fixed wireless access in some cases private networks. So all that is one and that's the efficiency and the scale. We're wringing right now, which we expected when we started with five D and the C band to see that we get to leverage mobile overtime, but of course, it's going to roll.
As soon as we deploy our C U.
We get better uptake from our wireless customers and of course, we'll open up fixed wireless access would that should be posted you will all the time for us and when it comes to this lingering question about capacity, we don't have any capacity problems. I mean, the guys are doing an enormous a good job at all the ways when it comes to Verizon and capacity network.
Over the next year or so I'm I'm confident that this will create more opportunities for us now when we get hold of the next tranche of the C band spectrum.
Okay, Simon and then on your question on the cash generation here, we're very pleased with the cash generation of the business cash on hand at the end of the quarter was $4 8 billion, which was very strong and are reflective of our strong free cash flow results and it is running higher than normal as a reminder, we do have about $4 5 billion of the C band clearing obligations.
Planning, Joe and the team are on it all the time and seeing that we're doing the right for our customers and remember we are building a multi purpose.
Networks that means that we have one radio that serve multiple opportunities wireless fixed wireless access.
In some cases private networks. So all that is one and that's the efficiency and the scale. We're wringing right now, which we expected when we start with five D and the C band to see that we get to leverage more of a little bit of time, but of course, it's going to roll out over the next year or so I'm I'm confident that this will create more opportunity for us now when we get old.
<unk> remaining in due soon and Thats, obviously, a priority for us.
Cash generation as I said is strong and gives us optionality and supports a much improved our dividend payout ratio our capital allocation priorities are unchanged. We said first we would invest in the business. The second priority is our commitment to the dividend our third priority is to Delever and Youll see us be focused on that and then once we get to the leverage Matt.
The next tranche of the C band spectrum.
Simon and then on your question on the on the cash generation you know, we're very pleased with the cash generation of the business cash on hand at the end of the quarter was $4 8 billion, which was very strong and reflective of our strong free cash flow results that it is running.
<unk> of <unk>, two five we will consider buybacks at that time.
Alright, thanks, so much yeah. Thanks, Simon Brad we're ready for the next question.
The next question comes from Phil Cusick of J P. Morgan Your line is open Sir.
Running higher than normal as a reminder, we do have about $4 5 billion of the C band clearing obligations remaining in due soon and that's obviously a priority for us.
Hey, guys. Thanks.
With the price increases and the impact of the new pricing structure. It looks like you are trending above the midpoint of service revenue growth.
Cash generation as I said is strong and gives us optionality and supports a much improved our dividend payout ratio our capital allocation priorities are unchanged. We said first we would invest in the business. The second priority is our commitment to the dividend our third priority is to Delever and Youll see us be focused on that and then once we get to the leverage.
It could be closer to the high end any reason to think it decelerates from here.
And then second Hans you spoke on private wireless can you dig into the market opportunity there and how long it takes for that to be $1 billion business. Thank you.
I thought where the second question I'm told I can come back on the first on the private wireless what we have found out during the work we've been doing is that private.
Trick of two <unk> two five we will consider buybacks at that time.
Alright, thanks, so much yeah. Thanks, Simon Brad we're ready for the next question.
The next question comes from Phil Cusick of J P. Morgan Your line is open Sir.
<unk> networks is something really really valuable for enterprises Smbs and the main reason is that that kept the capacity on it.
Hey, guys. Thanks.
With the price increases and the impact of the new pricing structure. It looks like you are trending above the mid point of service revenue growth.
Speed and the security it basically starts as a wildfire replacement on the licensed spectrum, and then youll start adding onto it.
It could be closer to the high end any reason to think it decelerates from here.
Usually start with one factory and if you see that working there they do it in all the factories that we have a growing list of new customers coming in in the first phase I would say D. C is a new business for US that again is building on the same investment the same Verizon intelligent edge network I don't do it.
And then second Hans you spoke on private wireless can you dig into the market opportunity there and how long it takes for that to be a $1 billion business. Thank you.
I thought where the second question and I'm told it couldn't come back on the first on the private wireless what we have found out during the work we've been doing is that private.
You should expect that it's a billion dollar business this year, but there's definitely a little bit of time. This is a very important ah.
<unk> networks is something really really valuable for enterprises Smbs and the main reason is that they kept the capacity on it.
Level four Kyle and his team for the growth in the service revenue and actually doing even better in the EU with enterprises. So it's going to take some time, but.
Speed and the security it basically starts as a wildfire replacement on the licensed spectrum, and then youll start adding on to it.
I'm really pleased what I've seen the last couple of quarters. How this is Tony and I would say, we have now an ecosystem with devices with the radio base stations with our integrators and all of that which we haven't had before so I'm I'm I'm more optimistic than a longtime that private networks will be something and as you know I mean, we would.
Start with one factory and if you see that working there they do it in all the factories that we have a growing list of new customers coming in in the first phase I would say D. C is a new business for US that again is building on the same investment the same Verizon intelligent edge network I don't do it.
Where are you ahead of anybody else on this field and that's why I feel really confident we would take more than our fair share.
You should expect that it's a billion dollar business this year, but there's definitely a little bit of time. This is very important.
Yeah. Good morning, Phil and then on the on the service revenue as we mentioned upfront we have some tough comps as we lap the price up some last year, we do expect sequential improvements in the third quarter. One thing to note just on the on the prepaid revenue we did see a headwind in the quarter of about $125 million I would expect that to be at a similar level in the third.
For Kyle and his team for the growth in the service revenue and actually doing even better in the EU with enterprises. So it's going to take some time, but.
I'm really pleased what I've seen the last couple of quarters. How this is Tony and I would say, we have now an ecosystem with devices with the radio base stations with our integrators and all of that which we haven't had before so I'm I'm I'm more optimistic than a long time that private networks will be something and as you know I mean, we would.
Third quarter before it eases up in the fourth quarter, that's probably one additional data point for you.
Thanks, Tim.
Thanks, Phil Brad we're ready for the next question.
The next question comes from Frank Louthan of Raymond James Your line is open Sir.
Way ahead of anybody else on this field and that's why I feel really confident we would take more than our fair share.
Great. Thank you can you walk us through the correlation between the broadband adds and the business wireless ads, including both the fires and fixed wireless and then you mentioned you're expecting some software upgrades are you anticipating having to subsidize any more for handsets to get ads as the year goes on.
Yeah. Good morning, Phil and then on the on the service revenue as we mentioned upfront we have some tough comps as we lap the price up some last year, we do expect sequential improvements in the third quarter. One thing to note just on the on the prepaid revenue, we did see a headwind in the quarter of about $125 million.
On the on the on the broadband side I think I got the question like that the correlation between the fixed wireless access in the files.
Expect that to be at a similar level in the third quarter before it eases up in the fourth quarter, that's probably one additional data point for you.
Let me say that rhythm on the fixed wireless access right now we are all.
Thanks, Tim.
Yep, Thanks, Phil Brad we're ready for the next question.
Growing that base of course, mainly outside the ILEC because that's just how it is because if I use is so strong. So we're doing great on the <unk> business and as you have seen even though it's a softer housing movement season than before we're doing great. I mean over 50000 again on fire. So far ours is doing really well.
The next question comes from Frank Louthan of Raymond James Your line is open Sir.
Great. Thank you can you walk us through the correlation between the broadband adds and the business wireless ads, including both the fierce and fixed wireless and then you mentioned you're expecting some software upgrades are you anticipating having to subsidize anymore for handsets to get ads as the year goes on.
And then of course.
A portion of a converged customers that is now growing is not growing that to come through European levels or something but it's growing the good thing for US is we're owners economics on everything fixed wireless access wireless files were warm network by our own fiber.
On the on the on the broadband side I think I got the question like that the correlation between the fixed wireless access and the fires I mean, let me say that with them and on the fixed wireless access right. Now. We are are we are growing that base of course, mainly outside the ILEC because that's just how it is because if I use is so strong so.
And that of course gives us opportunity to meet customer demand honestly, if they won't come out yes, we're not and that nobody else has in the industry. So.
We're doing great on the <unk> business and as you have seen even though it's a softer housing and movement season than before we're doing great. I mean over 50000 again on fire. So fires is doing really well.
Really pleased with the developmental or broadband for us. We outlined this is one of the most important <unk> innovations with them.
We had a.
Then of course, we will have.
Substantial new customers there so.
A portion of a converged customers that is now growing it's not growing that to come through European levels or something but it's growing the good thing for US is we have owner's economics on everything fixed wireless access wireless files were warm network by our own fiber.
Now this is a great deal beyond Dennis So right now we continue doing.
Doing as we have done them and we have now $2 3 billion.
Customers on the fixed wireless access we can now start with different tiers different pricings. So we can meet customer demands that have different requirements.
And that of course gave us those opportunities to meet the customer demand and see if they won't come out yes, we're not and that nobody else has in the industry. So.
And that's just good for us, but it's also really good for our customers because they can choose between different models, depending on what needs to happen.
Really pleased with the developmental or broadband for us. We outlined this is one of the most important <unk> innovations with them.
Yeah, and the only other thing I would add is that we have a great rhythm at 400000.
Broadband net adds in the quarter and again another the third consecutive quarter of over 400000 broadband net adds and we continue to see good momentum with customers, taking wireless customers, taking up WAM, we see great progress there as well.
We had a.
Substantial new customers. There. So this is a great deal beyond dentistry. So right now we continue doing.
And then you had a question on upgrades.
Doing as we have done them and we have now $2 3 billion customers.
Customers on the fixed wireless access we can now start with different tiers different pricing. So we can meet customer demands that have different requirements and that's just good for us, but it's also really good for our customers because they can choose between different models, depending on what needs to happen.
As you have seen and promos.
That is clearly down in the second quarter and the first quarter as well there are many reasons. Some are of course that we are much more financially disciplined.
That's very important but it's also have haven't been any in any major new devices coming out it will probably come on in the second half. It usually comes so we're going to see that but I don't foresee that we will come back to the levels, we've seen before from but from our point of view of Verizon, We think that we're going to be disciplined we're going to offer a device.
Yes, the only other thing I would add is that we have a great rhythm at 400000 broadband net adds in the quarter and again another the third consecutive quarter of over 400000 broadband net adds and we continue to see good momentum with customers, taking wireless customers, taking up WAM, we see great progress there as well.
Some promos and upgrades.
And then you had a question on upgrades, yes, you have seen them for almost and that is clearly down in the second quarter and the first quarter as well. There are many reasons. Some are of course that we are much more financially disciplined that's very important but it's also have.
It was the best for the segment and for the customer, but it will not come back to the 11th somebody sold before.
Alright, great. Thank you yeah, Thanks, Frank Brad ready for the next question.
The next question comes from David Barden of Bank of America. You May go ahead Sir.
Hey, guys. Thanks for taking the questions.
So I wanted to come back to.
Haven't been any in any major new devices coming out it will probably come on in the second half. It usually comes so we're going to see that but I don't foresee that we will come back to the levels, we've seen before from but from our point of view over ice on we think that we're going to be disciplined we're going to offer a devices and promos and upgrades.
The relationship between Verizon and <unk> and the cable industry before the lead.
This was the big issue and.
If there were two pillars to the idea behind the relationship between <unk>.
Verizon in the cable industry, one was that somehow Verizon had negotiated a deal with the cable industry that they would guaranteed to make money no matter how much data cable.
There's the best for the segment and for the customer, but it will not come back to the 11th there'll be sold before.
Alright, great. Thank you yeah, Thanks, Frank Brad ready for the next question.
The next question comes from David Barden of Bank of America. You May go ahead Sir.
Consumers took and the second was that that deal would never and it was going to be forever.
Hey, guys. Thanks for taking the questions.
And so I feel like the messaging on that has started to change from.
So I wanted to come back to.
The relationship between Verizon and <unk> and the cable industry before.
<unk> from horizon, a little bit.
And that maybe that.
Before the lead.
Idea that cable and St is guaranteed to make money in this in the relationship.
This was the big issue and.
If there were two pillars to the idea behind the relationship between <unk>.
Shift between Verizon and cable.
Regardless of data consumption there.
Verizon in the cable industry, one was that somehow Verizon had negotiated a deal with the cable industry that they would guaranteed to make money no matter how much data cable.
That's not true and then the steel isn't permanent.
Change.
At some future time.
Even though the Doj, obviously, you need to have some deal.
Consumers took and the second was that that that deal would never earn it was going to be forever.
But it doesn't have to be this deal.
I was wondering if you could kind of just address that for US right now thank you.
David.
And so I feel like the messaging on that has started to change from.
Thank you for the question. This is a complex area I remember many of these things.
<unk> from horizon, a little bit.
We cannot talk about we have mdas when it comes to contract the only thing that I, even securing dates that Verizon is making making money on this that I can tell you and we think this is an important business. These are important customers to us and again I'll go back to what I talked about before we build a network once the more connections and more usage and more revenue.
And that may be dead.
The cable industry is guaranteed to make money in the in the in the relationship between Verizon and cable.
Regardless of data consumption.
That's not true and then the steel isn't permanent.
Change.
We have on it the better return on capital it is and as long as we see that's happening. We will continue the work were doing however, I cannot go into specifics on the on the contracts because.
At some future time.
Even though the Doj, obviously, you need to have some deal.
But it doesn't have to be this deal.
I was wondering if you could kind of just address that for US right now thank you.
First of all I'm not allowed to do it so but clearly you should feel confident that Verizon is doing that with the best interests of our stakeholders and our shareholders. So and we want to get the best return on our invested capital in the network.
David.
Thank you for the question. This is a complex area I remember many of these things.
We cannot talk about we have mdas when it comes to contract the only thing that I have in securing this that the Verizon and making making money on this that I can tell you and we think this is an important business. These are important customers to us and again I go back to what I talked about before we build a network once the more connections and more usage and more revenue.
Thank you, yes, thanks, Dave Brad we're ready for next question.
The next question comes from Michael Rollins of Citi. Your line is open Sir.
Thanks, and good morning, two questions if I could first just following up on the comments.
We have on it the better return on capital it is and as long as we see that's happening. We will continue to work were doing however, I cannot go into specifics on the on the contracts because.
Around hearing of fixed wireless and potentially on speed is.
Is there also an opportunity to begin hearing mobile <unk> wireless in terms of Megabits per second rather than a historical way of.
First of all I'm not allowed to do it so but clearly you should feel confident that Verizon is doing that with the best interests of our stakeholders and shareholders. So and we want to get the best return on our invested capital in the network.
Hearing on gigabytes per month of consumption.
And then just secondly, you mentioned that the cash Capex is tracking to guidance, but just curious as youre deploying the mid band spectrum.
Thank you, yes, thanks, Dave Brad we're ready for the next question.
The depth of it.
The next question comes from Michael Rollins of Citi. Your line is open Sir.
And seeing what the propagation is are there opportunities to get further efficiencies in capital and potentially go below that business as usual indication of Capex for 2024.
Thanks, and good morning.
If I could first just following up on the comments.
Around hearing of fixed wireless and potentially on speed.
Is there also an opportunity to begin hearing mobile <unk> wireless in terms of Megabits per second rather than a historical way of.
Hey, Mike. Thank you for the question.
On the question about the different models all the time, how we can charge for <unk> I think we're fine to good model within my plan right now with different type of network options that you can take.
Hearing on gigabytes per month of <unk>.
Some shape and.
Then just secondly, you mentioned that the cash capex is tracking to guidance, but just curious as youre deploying the mid band spectrum.
Take your perks all of it is accretive for US you should you see the first are the so called.
Launch here as the first time, we come out with the platform, we see multiple opportunities how you can sort.
The depth of it.
And seeing what the propagation is are there opportunities to get further efficiencies in capital and potentially go below that business as usual indication of Capex for 2024.
Diverse that one in different ways to meet different customer demands. So you you would probably see more of that going forward. How we will do that so clearly a very important to us that we continue to meet our customers with new plans and things like that but not a great base that is my plan.
Hey, Mike. Thank you for the question.
On the question about the different models all the time, how we can charge for five E. I think we're fine a good model within my plan right now with different type of network options that you can take.
On the Capex side.
I think we have.
Going over.
A fairly long hump here coming from Verizon intelligent edge network.
Take your perks all of it is accretive for US you should you see the first are the so called launch here as the first time, we come out with the platform, we see multiple opportunities how you can.
<unk> fiber investing.
Two are in all the parts of millimeter wave than coming into the humbled C band now becoming to be are you as far as we can see right now is <unk>, which is around 17% to seven and a half and thats going to see that we can deploy to C band getting all the benefits, we talked about <unk> coming due.
Sort of diverse that one in different ways to meet different customer demands. So you you would probably see more of that going forward. How we will do that so clearly a very important to us that we continue to meet our customers with new plans and things like that but not a great base that is my plan on.
Fiber, it's more success based so there's a lot of things happening there, but we're really confident that we can be on those levels and our team is really doing a great job.
On the Capex side.
I think we have.
<unk> gone over sort of a.
Okay, great. Thanks, Mike Yeah, Brad we're ready for the next question.
A fairly long a hump here coming from Verizon intelligent edge network.
The next question comes from Craig Moffett of Moffett Nathanson you May go ahead Sir.
Vesting in fiber investing.
Two are in all the parts on millimeter wave than coming into the humbled C. Band now we're coming to be are you as far as we can see right. Now is be of you, which is around 17% to seven and a half and that's going to see that we can deploy to C band getting all the benefits we've talked about Ford is coming down.
Hi, two questions if I could first if I could return to the led topic for one moment.
Can you just talk about the extent to which you use.
Over lashing.
Fiber to what might potentially.
Italy be led led cables, particularly in your aerial plant in the northeast.
<unk> fiber is more success based so there's a lot of things happening there, but we're really confident that we can be on those levels and our team is really doing a great job.
And then second I just wonder if you could just.
Help us think about the trajectory going forward.
Fixed wireless which.
Has seemingly sort of steadied out to two.
Okay, great. Thanks, Mike Yeah, Brad we're ready for the next question.
To a relatively stable number is that what we should expect because that would take us a bit higher than your guidance.
The next question comes from Craig Moffett of Moffett Nathanson you May go ahead Sir.
By the end of 2025, so I'm just wondering how we think about the pacing of fixed wireless.
Hi, two questions if I could first if I could return to the led topic for one moment.
Can you just talk about the extent to which you use.
Thank you Craig start with fixed wireless access question because.
Over lashing.
I think that the.
Fiber to what might potentially be led led cables, particularly in your aerial plant in the northeast.
It's an important one and we.
We will hear from Tony on that one on the fixed wireless access Youre right. I mean, we are now running on the on a fairly high level, adding broadband subscriber quarter remember we have a defined we are roughly in the I would say at least with over 70.
And then second I was just wondering if you could just.
Help us think about the trajectory going forward.
Fixed wireless which.
Has seemingly sort of steadied out to two.
All the P. H C band so far out of 402. So that's of course is how many Oss are open for sales. We can do right now so that that is a little bit. The next step we're going to be the next tranche coming in and I said, we're well ahead for the four to 5 million are the team is doing great job you also.
To a relatively stable number is that what we should expect because that would take us a bit higher than your guidance.
By the end of 2025, so I'm just wondering how we think about the pacing of fixed wireless.
Thank you Craig start with fixed wireless access question, because I think that it's an important one.
So that we know are are doing some great work on how we can address MD using a very efficient way. We're in the beginning of that so all in all I think that fixed wireless access and how we're managing our network is growing right and of course as our ambitious leader as I am I I expect that we can do better of course.
We will hear from Tony on that one on the fixed wireless access Youre right. I mean, we are now running on the on a fairly high level, adding broadband subscriber quarter remember we have a defined we are roughly I would say at least with over 70, Oh the P. A C band so far out of 402 so.
But right now that's a forecast what have the $4 million to $5 million and we are really doing well on the customer satisfaction on fixed wireless access.
That's of course is is how many Oss are open for sales. We can do right now so that that there is a little bit to the next step is going to be the next tranche coming and I said, we're well ahead for the $4 million to $5 million are the team is doing great job. You also saw that we now are doing some great work on how we can address.
So good you know, it's so simple you install it yourself you get broad, but immediately and so we're just meeting consumer demand that no one else is doing basically.
So I'm really pleased with the product we talked about this being one of the most important filed the applications and now you can see what is what it means to us and how important is going to be overtime.
<unk> seen a very efficient way we're in the beginning of that so all in all I think that fixed wireless access and how we manage our network. It is.
And then Craig on the led as we said earlier, it's a small part of our network. It's about 50% aerial we said we're still reviewing the historical records both.
Great and of course as Ah.
Viciously there as I am I I expect that we can do better of course, but right now that's a forecast what have the $4 million to $5 million on and we're really doing well on the customer satisfaction on fixed wireless access is so good you know it is so simple you install it yourself you get broad, but immediately and so we're just meeting consumer demand.
Farmer, Mci network and the format. So copper networks. So we still have work to do there and we're going to take a very methodical approach very fact based very scientific based approach and as we know everyone wants more information and as we learn more we'll keep you updated.
No one else is doing basically so I'm really pleased with the product we talked about this being one of the most important five applications and now you can see what is what it means to us and how important is going to be over time.
Yep.
Yeah.
Okay, Yeah, Thanks, Craig Brad we're ready for the next question.
The next question comes from Bryan Kraft of Deutsche Bank. Your line is open Sir.
And then Craig on the led as we said earlier, it's a small part of our network, it's about 50% area.
Hi, good morning.
I wanted to ask two if I could I guess.
First.
Just on the lead issue I was wondering if you thought this might lead to an acceleration in copper network retirements and therefore, an accelerated reduction in fixed costs for legacy networks. It seems like an opportunity in cases, where communities by one.
We're still reviewing the historical records, both former Mci network in the former XO copper networks. So we still have work to do there and we're going to take a very methodical approach very fact based very scientific based approach and as we know everyone wants more information and as we learn more we will keep you updated.
<unk> does not have.
Cable in their communities, even if it isn't actually shedding any led.
And then secondly, I just had a follow up to Simon's question earlier can you talk about how the remaining C band deployments will affect the fixed wireless opportunity in rural areas.
Sure.
Okay, Yeah, Thanks, Craig Brad we're ready for the next question.
The next question comes from Bryan Kraft of Deutsche Bank. Your line is open Sir.
Specifically, how much of an expansion in the rural footprint will that represent versus the available footprint today fixed wireless.
Hi, good morning.
Wanted to ask two if I could I guess.
First.
And would that include a lot of areas that aren't served by anything today, except for copper infrastructure. So you know kind of the true rural areas. Thank you.
Just on the lead issue I was wondering if you thought this might lead to an acceleration in copper network retirements and therefore, an accelerated reduction in fixed costs for legacy networks. It seems like an opportunity in cases, where communities by one.
So on the first one.
We have a we have always planned for network transformation.
<unk> did not have led.
Continuous ongoing that has not changed what when it comes to this.
Cable in their communities, even if it isn't actually shedding any led.
And then secondly, I just had a follow up to Simon's question earlier can you talk about how the remaining C band deployments will affect the fixed wireless opportunity in rural areas.
She did cables discussion.
I mean, we're going to go through these scientific we're gonna do test, we're going to do in fact base and then we'll come back, but we have a normal and that's the transformation that we constantly do because Kyle and team are doing that in order to keep up with the with the preshow. The secular decline in wireline. So he will continue to do that and we do that all the time.
Specifically, how much of an expansion in the rural footprint will that represent versus the available footprint today fixed wireless.
And would that include a lot of areas that aren't served by anything today, except for copper infrastructure. So you know kind of the true rural areas. Thank you.
The second question on fixed wireless access you know of course, when we end the first 70 I would say each.
So on the first one.
We have a we have always a plan for network transformation.
C band more P. He said this call.
We continuously ongoing that has not changed.
We are mainly in urban areas.
When it comes to this allege she did cable discussion.
That's where we have had that good traction on fixed wireless access in the next step is going to be much more suburban and rural and of course, that's great opportunities because you should or even less.
I mean, we're going to go through these scientific we're gonna do test, we're going to do in fact base and then we will come back, but we have a normal and that's the transformation that we constantly do because Thailand team are doing that in order to keep up with the with the pressure of the secular decline in wireline. So he will continue to do that and we do that all the time.
Different options options for customers in those areas. So of course, that's going to create opportunities for us that doesn't mean that we're changing our our our guidance. We would still say four to 5 million by 2025 of course the team is always driving harder when I'm driving hard we always want to achieve we want to show our stakeholders that we're a great company and we execute well.
And the second question on fixed wireless access you know of course, when we end. The first 70 I would say each a C band Mark P. He said this call they are mainly in urban areas.
Which I think were doing so definitely.
We see opportunities to be coming with the next tranche of sema.
Great. Thank you very much yes, thanks, Brian .
And that's where we have had that good traction on fixed wireless access in the next step is going to be much more suburban and.
Brad we're ready for the next question.
The next question comes from Tim Horan of Oppenheimer.
And of course, that's great opportunities, because you should or even less.
Your line is open Sir.
Thanks, Bob on the wholesale.
The option of options for customers in those areas. So of course, that's going to create opportunities for us that doesn't mean that we're changing our our our guidance. We would still say four to 5 million by 2025 of course the team, it's always driving harder when I'm driving hard we always want to achieve we want to show our stakeholders that we're a great company and we execute well.
Cable side, maybe just discuss our wholesale wireless ARPA is broadly speaking do you think you can grow wholesale wireless offers.
The $10 increase in fixed wireless question do you think that would slow on a sub growth.
Quarterly.
Okay, and then lastly on the led side can you just qualitatively talk how often are your workers exposed to lead I'm sure you have to log Bob.
I think we're doing so definitely.
We see opportunities to be coming with the next tranche of Cmos.
And what do you do to kind of protect workers have you ever seen any claim some work for us on lead poisoning.
Great. Thank you very much yeah. Thanks, Brian .
Brad ready for the next question.
The next question comes from Tim Horan of Oppenheimer.
There were many questions in there so let me start by the change of discounts that we did on fixed wireless access again, we have a premium product.
Your line is open Sir.
Thanks, Bob on the wholesale.
<unk>, maybe just discuss our wholesale wireless all whose broadly speaking do you think you can grow wholesale wireless offers on them.
Have different type of Optionality for our customers in order to pick and choose what's the best here. So I'll walk the best services. So we think that this is just natural when you have passed over 2 million subscribers on fixed wireless access and I think you just think about when we started with unlimited you start with one plan and then you start to work with different segments.
Dollar increase in such as the wireless question do you think that would slow kind of sub growth.
Quarterly.
And then lastly on the led side can you just qualitatively talk how often are your workers exposed to a lot of them I'm sure you have the logged out.
Because ultimately we are in a very very big consumer business, where so many differentiated customers that that they that needs different type of Oh services. So you think about it as a very natural step for us.
You know what do you do to kind of protect workers have you ever seen any claim some work was on life.
Thanks.
There were many questions in in all there. So let me start by the change of discounts that we did on fixed wireless access again, we have a premium product we have different type of optionality for our customers in order to pick and choose what's the best theory, So I'll walk through best services. So we think that.
In order to serve our customers in a good way.
And I hand, it over to Tony for the next question on the <unk>.
Cable partnership with minutes has mentioned and we don't go into the details I mean, we continue to see.
This is just natural when you have passed over 2 million subscribers on fixed wireless access I think you just think about when we started with unlimited you start with one plant and then you start to work with different segmentation because ultimately we are in a very very big consumer business, where so many differentiated core customers.
Volume growth.
In the in the relationship and we're very satisfied with the relationship and we continue to monetize the network as Hans said earlier.
And then on Walker work a lot of exposure.
We continue to work well.
Across the company and continue to take a methodical approach, we're not going to get into any specifics around employees or anything but as we said we will keep you posted as we learn more.
That's the that needs different type of Oh services. So you think about it as a very natural step for us.
In order to serve our customers in a good way.
Yeah, Thanks, Tim Brad ready for the next question.
And I hand, it over to Tony for the next question on the <unk>.
The next question comes from Peter <unk> of Wolfe Research, Sir you May go ahead.
Cable partnership in minutes has mentioned and we don't go into the details I mean, we continue to see you know.
Hi, Thank you I wanted to ask two.
Volume growth.
Crude rates and the other on the FWS I and upgrade rates I wondered if you could discuss why they've fallen so much and whether it's sustainable what the risks are.
In the in the relationship and we're very satisfied with the relationship and we continue to monetize the network as Hans said earlier.
Recent trend and on <unk>, just wonder if you could discuss the service price increase that we learned about this week.
And then on Walker work a lot of exposure.
We continue to work well.
Yes.
Across the company and continue to take a methodical approach, we're not going to get into any specifics around employees or anything but you know as we said we will keep you posted as we learn more.
On the upgrade rates.
As said before I mean first of all we have today.
<unk> has been very disciplined in how to offer.
Yeah, Thanks, Tim Brad ready for the next question.
The offer.
Sort of products and services with the right price at the right time. So definitely that's a that has been that we are actually doing less promotion and less upgrades that has not hampered our way of growing our business or taking customers are and we will continue to work with that then of course hasnt been any.
The next question comes from Peter Xu Pinot of Wolfe Research, Sir you May go ahead.
Hi, Thank you I wanted to ask two.
Crude rates and the other on the FWS I and upgrade rates I wondered if you could discuss why they've fallen so much and whether it's sustainable what the risks are.
Recent trend in non FTE related just wonder if you could discuss the service price increase that we learned about this week.
Major a product coming out in the market, we expect that it's going to be a product coming out in the second half. We're excited over that then of course, that's going to drive upgrades and and promos of course, but again, we will continue to be very financially disciplined about those.
Yeah.
On the upgrade rates.
As said before I mean first of all we have today.
<unk> has been very disciplined in how to offer.
The offer.
Of course, we're excited for these type of things as it attracts our store traffic and store traffic comps. We are really good then and they're having a good conversion rate, adding things to it to our customers, which is really really important.
Sort of products and services with the right price at the right time, so definitely that's a that has been that we're actually doing less promotion and less upgrades that has no time for our way of growing our business or taking customers are and we will continue to work with that then of course hasn't been any.
Second on the fixed wireless access.
The taking away the discount again, we come to a level of $2 3 million fixed was actually customer there. There's so many different types of customers and consumers, while so of course, having different tiers and pricings.
Major a product coming out in the market, we expect that it's gonna be a product coming out in the second half. We're excited over that then of course, that's going to drive upgrades and and promos of course, but again, we will continue to be very financially disciplined but of course, we're excited for for these type of things.
It becomes very normal in order to meet customer demands. So it's just how we how we do that we'll continue to do and see how the market is developing.
Thank you.
Our store traffic and store traffic comps, we are really good then and they're having a good conversion rate, adding things to it to our customers, which is really really important.
Okay, Hey, Brad we have time for one more question.
The final question for today will come from Walter Piecyk with <unk>. Your line is open Sir.
Second on the fixed wireless access.
Thanks, Hans I, just wanted to actually do a follow up to that.
The taking away the discount and again, we come to a level of $2 3 million on the fix was extra customer there. There's so many different types of customers and consumers.
Good question.
Well, we started many years in your phone.
We can hear you well, we can hear you walk though.
Hear me Okay.
Of course, having different tiers and pricings.
Why are we telling me to check.
It becomes very normal in order to meet customer demands. So it's just how we how we do that we'll continue to do and see how the market is developing.
[laughter] the less maybe it was trying to mutiny.
The last of the last two years.
Grade rate is actually.
Climb in the third quarter. So I just wanted to kind of piecemeal together.
Thank you.
Okay, Hey, Brad we have time for one more question.
Like you said youre not going to do handset promotions earlier in the call.
The final question will come from Walter Piecyk of light shed your line is open Sir.
Obviously, everyone knows Apple comes out with a new product but.
In the last answer it sounded like you thought people would upgrade more but.
Thanks, Hans I, just wanted to actually do a follow up to that.
Good question.
What seasonal trends should we see here I assume.
10 years in your phone.
You're still expecting it to be down year on year, but what about sequentially because it's been typically down sequentially in the third quarter for the last two quarters, maybe COVID-19 had some impact on that number now.
We can hear you well, we can hear you walk though.
Hear me Okay.
Why are you telling me to check.
And then my second question on Capex.
So maybe it was trying to mute.
There's some debate I think a lot of the tower companies specifically.
The last of the last two years.
Grade rate is actually.
Trying to drive this narrative of like Oh, yeah.
Climb in the third quarter, so I, just want to kind of piecemeal together.
C band is going to get deployed.
Like you said youre not going to do handset promotions earlier in the call.
They are doing fixed wireless in all of these things youre going to have to come back.
And do Densification very quickly so any low in capex will be short lived I'm. Just curious I mean, obviously, we saw the capex drop very quickly here in this quarter, how how long do you think this kind of Capex holiday will exist before you need to come back.
Obviously, everyone knows Apple comes out with a new product but.
In the last answer it sounded like you thought people would upgrade more but what what seasonal trend should we see here I assume you.
You're still expecting it to be down year on year, but what about sequentially because it's been typically down sequentially in the third quarter for the last two quarters, maybe COVID-19 had some impact on that number now.
And use densification in the in the <unk>.
In the absence of additional spectrum are sourced by the FCC.
And then my second question on Capex.
Yeah. Thank you. Thank you on the upgrade.
There is some debate I think a lot of the tower companies specifically.
That's why I cannot I don't know anything about the any launch or the product how exciting it is going to be but ultimately.
Trying to drive this narrative of like Oh, you know your.
C band is going to get deployed but theyre doing fixed wireless and all these things you're going to have to come back.
Ultimately that usage, usually drive more upgrades, so let's see what's going to happen. This time and when it comes out but we're always excited to see Apple coming out with a new phone you know hopefully that coming in this half you know I cannot reveal what they are doing but clearly we're excited for that on the Capex. Yeah, you should talk to US we know more about this than.
Densification very quickly so any low in capex will be short lived and I'm. Just curious I mean, obviously, we saw the capex drop very quickly here in this quarter.
How long do you think this kind of Capex holiday will exist before you need to come back.
Other companies I would say, we have a really good a sustainable level of these densification.
And use densification in the in the in the absence of additional spectrum are sourced by the FCC. Thanks, Yeah. Thank you. Thank you on the upgrade.
It's part of our strategy already so and many of the things that we're already deploying on C band, we deploy sort of for the for the full spectrum already from the beginning then we turn on when we get those tranches. So there's a lot of things that my team has done over the years in order to be as efficient as possible Capex, that's why I feel really good.
Uh huh.
That's why I cannot I don't know anything about the any launch or the product how exciting it is going to be but the.
Ultimately that usage, usually drive more upgrades, so let's see what's going to happen. This time and when it comes out but we're always excited to see Apple coming out with a new phone you know hopefully that coming in this half you know I cannot reveal what they are doing but clearly we're excited for that on the Capex. Yeah, you should talk to US we know more about this.
On our on our sort of the year, you were around 17% or 70% off I feel really good about that because we go through these extremely detailed so are we.
We feel confident great alright.
Other companies I would say, we have a really good a sustainable level of these densification.
Great. Thank you yeah, Thanks, a lot Brad.
Brad that was all the time, we have for today.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and for using Verizon Conference services you may now disconnect.
It's part of our strategy already so and many of the things that we're already deploying on C. But we deploy sort of put a put a full spectrum already from the beginning then we turn on when we get those tranches. So theres a lot of things that my team has done over the years in order to be as efficient as possible. Okay. That's why I feel really good.
On our on our short tailed via you were around 17% to 17 and off I feel really good about that because we go through the extremely detailed so are we.
We feel confident great alright.
Great. Thank you, yes, thanks, Brad.
Brad that was all the time, we have for today.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation and for using Verizon Conference services you may now disconnect.
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