Good afternoon, everybody. Tim Horan, the cloud and communications analyst here at Oppenheimer. My pleasure to be hosting Verizon's head of the business unit who used to run and build all their networks, so he's got a very interesting outlook on what's going on in the whole industry. We don't talk about the business unit a real, real lot, or at least you know publicly too much, so this has been a something I'm really looking forward to. So Kyle, I guess to start off, which job do you like better, running a whole company or running the network?
Oh, that's, that's an unfair question. They're both fantastic. But, you know, here's what I would say. You know, I'm an engineer by heart, and, you know, that's how I grew up, and I like to build things, and I still get to do that here on this side of the house. It's just a little bit different. Instead of worrying about so many bits and bytes, I'm worrying about, you know, EBITDA margins and the like. But it's all problem-solving and helping our customers, so it's all good.
Good stuff. Can you maybe just describe what's in the Verizon Business Group and how it's organized, and if you can give any color around, you know, the primary products and services, how you think about them now?
Sure, no problem. But first, let me say we got safe harbor statement. I might say some stuff that is forward-looking, and you know the you guys know the drill, right? So, all right, how we're organized. It's very simple. It's really based on business units. It's really how we face the customer. So it's really on the size of the customer. We service everybody from you know, two guys in a garage, small business, all the way up to the most sophisticated enterprises in the world across the globe, right? So, how we organize ourselves is around the customer's needs, 'cause they are different. So really I have one segment that we call Business Markets, and that's the smaller, kind of small business, medium enterprise. And then we have Global Enterprise and Public Sector.
That's all in one group. I also have another group that's Wholesale. That's a much smaller part of the business, but that's the arm of the business that we sell into other telcos and whatnot. So, that's generally just really based on the customer, and then so we can focus on what their needs are, and we can tailor our commercials in the appropriate way, as well as bring technologies that target the right customers there. So largely, you know, mobility, you know, whether it be fixed wireless access, smartphones, tablets, laptops, that's obviously a very big part of our business.
And then on the landline side, we have our Fios offering, you know, Fios for Business, as well as, you know, the things that large businesses would consume. So, you know, ultra-long haul, Private IP networks, public IP networks, and then we also offer services out on top of those connectivity kind of offerings. So in general, it's connectivity and then services up above that.
You're pretty unique in the industry, and maybe even globally, that well, you've really integrated wireless with wireline pretty aggressively in your unit. Wireless is almost half your revenue at this point. And you know, your overall growth rate looks, you know, quite a bit better because of that. Can you maybe just talk about being so integrated with wireless and wireline, do you have some unique products out there that you think, or unique go-to-market that gives you a competitive advantage?
First of all, let me start with, you know, we used to run, you know, before we reorganized, we used to run the network separately. And putting them together, and I was CTO at the time, and putting those together, really it saved us a lot of money. It drove a lot of efficiencies. But now you start seeing the ability to have similar services that can cut across different connectivity methods. So for instance, you know, SD-WAN is something that's very popular right now, and we offer that both on our wireline side, so if you on Fios or any other of our internet products, and also on the fixed wireless access side.
So it's whatever the customer wants for connectivity, you know, we let them choose, but then we're able to put these add-on, bolt-ons we call them, other products and services, you know, depending on what kind of connectivity they want. The other thing is now we're able to bundle different things together. That's allowed us to do some new things. We actually just came out in the market a little while ago with a soft launch on our Verizon Business Complete. And really what it is, it's you know, it's kind of service as a service, right? So we'll give you smartphones, connectivity, take care of your mobile device management. Basically, take all of the work, the heavy lifting, off of an enterprise and do it for a monthly recurring fee.
So there's no capital, there's no nothing. So we do. The ability to have all of these products and services combined and converged gives us a much easier way to meet our customers' needs.
Yeah, I think you guys talked about the mobile device management on the last earnings call, and I definitely wanted to talk to you about that. So can you just elaborate on what that product is a little bit more, and you know, how unique it is, and you know, how much of an opportunity do you think that is?
I think, I think it's a great opportunity for us. We're the only ones in the market with this, and, we did a soft launch just so we can kind of learn and make sure that our systems are working correctly and all that kind of thing. But it's not rocket science. It's, say you have a company, you know, you got a couple 100 people in your company that have phones or devices, and, you know, just dealing with what happens with phones, people break them, you know, just, and returning them, and just dealing with the logistics, you know, takes people's time away from their, what they're really trying to accomplish with their customers. So we just take that burden off of their hand...
And so we basically manage their fleet of devices for them in a way that's a predictable monthly fee, and they can get upgrades. We can take care of their security for them. If they break phones, we take care of all of that. So it's really gives them peace of mind, and what we're finding, it really, it's starting to resonate with some of our customers here, the new customers that we're talking with, because they're like, "Hey, you know, I burn up three people's time in any given week worrying about this stuff.
Now I don't have to." So over time, and I see this can grow, as you talked about convergence of wireline and wireless, we can bring other devices, other services into the mix, so it just makes it really simple for people to do business with us, and they have... Every month they're gonna get the same bill. So, we think it's, you know, it's early days for us. You're gonna see us launch whole hog here in, towards the end of this month.
So, not to put words in your mouth, but so do you own the devices, and then they pay you, like, $25 a month, or?
Yep, exactly.
Okay.
So it's just a bundle. We put it all together to say, "You know, this is great for a small business." Say, you're a startup. You need some computers, you need, you need some smartphones, you need connectivity. We could put all this together for you in one simple package, and then you, you pay us a monthly fee. So you don't have to... You- any CapEx that you have or money that you have on hand to start your business, you can use in other ways than for telecom services.
So the products and services in the business market have been rapidly evolving our whole careers, to be honest-
Yeah, right.
Particularly what we started out selling. Where are we, do you think, in making the migration to more, you know, modern, you know, internet or, you know, fiber internet, cloud-like services? Because I think that's weighed on the industry's growth rate for quite a bit of time. Yeah.
Yeah, no, I think, the, the AI stuff, you know, I think is, is, is a game changer. It's the next kind of technology evolution, and we're positioned well to really, to help enable that, and, and, and, and make money while doing it, frankly, right? 'Cause it's, you know, it's no surprise our, you know, our wireline business, our legacy wireline business, you know, really specifically Private IP and MPLS, that's been in decline as people have been digitizing, as enterprises have been digitizing and put all their workloads in the cloud. And, you know, the, the hyperscalers, they build their own networks and, and, and cobble them together. But AI, just how it works and the need to have a lot more of the workloads distributed, is actually opportunity for, for us.
We have a lot of fiber, not only long-haul fiber, not only last-mile fiber, but the middle mile. And I think in the new world, as AI gets more and more traction and it gets more and more usage, the need for more metro middle mile, both not only fiber, but power, space, and cooling, and putting these things together and networking them. And also, not only for the hyperscalers, but I think you're gonna see a bit of a resurgence in private data centers again, because not everybody's gonna wanna have their run their data outside their premises. So I think there's gonna be some great opportunity for us, and I think that's how it's gonna evolve.
'Cause once the middle mile and data centers and the cloud guys, then you'll start seeing more innovation at the edge. And so I think, I think, you know, the next 5, 10 years are gonna be really exciting in this area for us.
Where are we in the decline of the legacy MPLS business? Do you think that's largely behind us, or we got a few more years left?
I still think we got a couple more years left. It's interesting, though. We've seen some customers gone, some customers gone, you know, they went all in on SD-WAN, and now I'm seeing some of them come back, right? They've seen there's value in MPLS networks, so I've seen some of them come back. But we do believe, I mean, as best we can tell, that the decline's still gonna continue for a little while, but then we think it'll stabilize, and then I think there'll be new networking opportunities for us as AI gets more and more traction.
I mean, so if we take out that decline, is the... Do you think the industry is growing, you know, in line with inflation, or is it still, like, under some pressure?
It's a good question. I don't know I have an answer for that, 'cause I haven't really looked at it in that term.
Yeah, it's not a bad question.
But, you know, 'cause I'm looking in dollar terms and percent decline of that business, and I think we're in high, higher single digits right now of decline, and I think over time, the next couple years, we get down to low single digits, and I think you hit a you know, I think you hit a low water mark. But that could be, you know, 12, 18, 24 months, maybe even a little, further than that. But, but I think the wild card's gonna be how much of this AI stuff takes off, and how quickly can we provide, we can provide customers with, either power, space, cooling, or fiber.
Why, why does AI have to be more distributed workloads?
I think, well, because... Building those massive, massive data centers is difficult. And when we talk to the hyperscalers, they're perfectly happy building kind of mesh network data centers in a certain metro. So smaller footprint, and then you could have the power distributed. So as long as you're within a certain range, if you have all the smaller data centers in a certain range instead of one big mega data center, they can make it work. Because when they're doing the training and stuff, they don't really need latency. Latency is not a big problem... but over time, when they're doing more inferencing instead of training, the latency's gonna become more of an issue, and then just making sure, you know, spreading the power around.
The power grid is the power grid, and we've learned that from, you know, 100 years of doing business. And this stuff is just because of the characteristics, it's gonna get distributed, and it's gonna go to the edge. And I guess finally, I think, there's a lot of politicians and rules coming around data sovereignty and all that kind of thing, and also CIOs are gonna wanna make sure they have full visibility and control over their data. And I think all these things together are just gonna lead to an outcome of a lot more distribution of the compute.
Is this part of what you guys call Mobile Edge Compute?
Mobile Edge Compute was a little bit different, 'cause that was really just... It's similar but different, because the compute is different. So these aren't, like NVIDIA-type processors, these are more of your, your, your CPU-type things. And really, so you could do applications, like traditional applications that you use today, just quicker, right? So we, we have a lot of customers where we do some, you know, online gaming and things, where latency really matters, and so therefore you want the compute right where you're, you know, you're doing the work. And we have some traction there, but this is gonna, the AI and Gen AI is gonna take that to a whole 'nother level.
You think AI is gonna drive increasing network traffic, you know, volume growth?
I think so. I think especially as you're training, and also in the inferencing, I think it's gonna, it's gonna... I've seen a lot of different studies. Some of them I think are crazy, but I also have to tell you that I've been doing this for a long, long time, and every time I think, you know, usage demand will maybe slow down a little bit, it only increases. And it's only. It's because you just talked about it before, the technology keeps changing, people find ways to leverage it, and it just, and, and it ends up being more data traffic. So, I don't think we're anywhere near the end of the data, data growth.
I mean, I personally think this is also gonna drive a demand for more IoT, because people are gonna wanna measure more things, and there's a lot more things they can do on an automated basis, you know, across the board. You can't wire everything-
We hope
... and you guys are pretty, you know, you have an amazing amount of spectrum with the millimeter, and the, your whole spectrum,
Mm-hmm
... portfolio. Will 5G standalone, will that improve, you think, your offerings quite a bit and enable other new offerings, and how does that really tie into AI, do you think?
Here, so that's, that's a lot there. I think, first of all, I agree with you 100%. I think GenAI's also gonna lead to more, more sensors out there, right?
Right.
'Cause you're gonna wanna instrument things up. So I think that's, I think that's gonna happen. And how I think of it is two ways. First, the opportunities with obviously monetizing that, but also private networks. So we're starting to see a lot of traction on CIOs wanting to put private wireless networks on their campuses, in their warehouses, or where they work, and then they can have the flexibility, so however Gen AI kinda comes out, they can have a flexible wireless, not all connected via wires, situation on their campuses. And we see a lot of people taking advantage of that right now and using it in interesting ways. So I think that's gonna drive more IoT.
I think there's gonna be a kind of a melding of what I call LAN, so like private networks in a campus, and then the devices going out onto our big wireless network, right? So there's gonna be interaction there. Do you need SA to do that? Not necessarily, but SA could give us some tools to really customize around some customer needs there. The other thing that I think is gonna be important is RedCap, or reduced capacity in 5G. That's gonna lead to cheaper modules, and less burden on the network, and I think that's also gonna help drive more connected devices, not just smartphones. And that's really important to my side of the business. So IoT, connected laptops, connected kind of everything, and using it in a way that is efficient on the network.
So all those things together, I think are gonna drive some more use for us.
Mm-hmm. Yeah, you guys can bundle it in very unique ways because of your convergence between the wireline and wireless networks.
Exactly. Exactly. And then, listen, I'm a you know, I was the CIO here for a while, too, running IT, and just the ability for me, during COVID, the ability for me to control devices that weren't in my shop, in my four walls, you know, that takes a lot of effort. And I think in a world where I can control policy, both in my place of work and out in the wild, is gonna be something that a lot of CIOs are really gonna wanna leverage.
So, there's an awful lot I wanna talk to you about. Every time you, every time you answer a question, I get five more questions in my head. But, just sticking on the AI and networking capacity for a moment, you know, Lumen announced a fairly large contract and a few other potential contracts for, for, you know, dark fiber, I think connecting up data centers for one of the hyperscalers.
Mm-hmm.
I think they're talking a total of $12 billion of dark fiber revenues. Are you guys doing much on the dark fiber side, and do you see much demand for interconnecting these large data centers?
So we do actually, we thought that was a good, that was a good announcement, 'cause it shows that this is this kind of starting to come along, right, in the industry? We do. We sell dark fiber, we sell Wave, we sell, you know, all of the things that you need to connect these things. You know, and it's a deal-by-deal basis, and I gotta be honest with you. Listen, it takes some capital to do these things because the hyperscalers, as you know, they have a lot of requirements in terms of what they want in terms of security, diversity of routes, you know, all these kind of things. So what we find when we win is when we have some assets already available, and we have a lot of assets out there, right?
I mean, we spent a lot of time on One Fiber, so we have a lot of fiber in many, many metros around the country where we deployed Millimeter Wave and then ultimately C-band and other small cells, and we can leverage that. So when we see some of these tenders coming out, and if we can have a good bit of the, you know, fiber in the ground already that we can leverage, then we can do these deals and we can make a good, good dollar on it, and they're long, long-term deals. So, so that's one thing. So we are... Yes, we're selling into that now. I think that's starting to grow a little bit.
It's not huge meaningful right now for me, but over time, the other assets we bring, like I said, we have tens of thousands of locations throughout the United States that we have latent power and power capacity, and space, and cooling, and the things you need to run these kind of compute. So we're right now working on trying to figure out where does this all evolve in the next 1, 3, 5, 10 years, and set up ourselves, how do we attack the opportunity? So you'll hear more from us about this, probably by the end of the year.
I didn't realize you still had much in the way of data center capacity. Are you talking about maybe repurposing some of your old central offices, or would they be-
Exactly, exactly. So, like, you know, we have thousands and thousands and thousands of them, and you draw... I mean, if you draw it way down to the edge at a cell site, I mean, we have hundreds of thousands, right? So, but in a lot of other areas, we have all of the locations that support both our wireless and our wireline infrastructure, and we can make some of that available.
Have you ever, or have you guys repurposed, you know, a central office yet to allow to resell for data center capacity?
So actually, we haven't done it to resell for data center capacity yet, but what we have done is repurposing them, sold them for condos and other things, right? So, you know-
Yeah
... we have a lot of different property. But now this new opportunity, you know, it has us thinking about maybe we could build maybe some more facilities, or more likely, take out some of the old gear that's sitting there and then open up the space for new compute.
Yeah, I mean, it makes a lot of sense. I mean, why do you think you haven't done it, you know, so far? I guess related to that, I know we were trying to rip out whole copper plant and a whole bunch of legacy switches. Have you done that in any markets, and would that be part of this process?
Yeah, no, we've been doing it for a long time now-
Okay
... so, 'cause it saves power. I mean, and, here, here's the simple answer. You go back to 5E technology and old switching technology, you know, what, what I could do on one floor of, of that gear, I can do in a corner, you know, a corner closet now, right? So, so that, that space we could free up and make available, and we're doing that. We've been, we've been modernizing and taking old stuff out for the last decade, and we just keep chunking away at it, chunking away at it. And, but that, at the end of the day, that leaves spare power space and cooling for us, and then we have the fiber as well, 'cause that's where the fiber, that's where the fiber is.
We think there's some opportunity here, and you'll hear more about it later on in the year, I think.
Cool. So just staying on the AI theme, can you talk about how you're using it yourself to cut down on expenses or any do you have any new products that are AI-based?
So I think we've really been using it to make things more efficient, right? And we've been using it for a long time. We've been using AI techniques, like kind of traditional AI techniques to help us actually model our networks and how we build our networks, right? GenAI is a whole new thing, which opens up some more opportunities for us. I'll give you one example that we're using in our group is, as you can imagine, in my world, the bills can get pretty complex, right? 'Cause you have a bundle of services from them, you know, different rates, different tariffs, taxes, all these things.
They can get a little convoluted, and we've been working over the last year, A, to make it simpler, but then, B, how do we explain to customers how it works? And then we've used AI really. Somebody can call us now, and we'd have a rep spend an hour explaining bills. Now we can do it automatically using Gen AI because we have all the data for the person's bills and why they're like that, so we can use a bot to actually explain on video to a customer why their bill is like it is. And that's been a huge savings for us, 'cause, you know, explaining one-on-one with a customer takes quite a while, so we've freed up a lot of manpower. Just, you know, that's just one easy example of it.
Wow. And fixed wireless has been a real home run for you guys, and I just hear from, frankly, people that use your fixed wireless product in the business market. They absolutely love it because it's just so much simpler to manage.
Mm-hmm.
Uh-
Yeah, we deliver it to you, and you start it right up. Yep.
It's consistent, right? You can do the whole country. If I got 50 locations, if I just got one throat to choke, and one set of CPE equipment to manage, you know, I can go from having, you know, two network engineers to one in a lot of ways. There is a question here, Kyle, I guess, you know, can you talk about, give us an update on how the strategy has evolved for your fixed wireless and how important it is, I guess?
Yeah, so I, I'll be honest, I'm really, I'm really happy about how this is playing out in the enterprise and small business markets. I think we're doing a little bit better than I had really thought we might, 'cause when we were imagining this, obviously we were thinking you know, mainly consumer, right? Just selling to the end consumer. I'm finding so many great use cases for it. First of all, it was, you know, basic internet access. Okay, we do that with FWA. Then we put SD-WAN on it, so now you can use it for if you have an SD-WAN deployment. That's been good. We're seeing people want it for backup, which is fantastic, 'cause you don't use a lot of data for backup.
Then we're finding that we're starting right now to enter some markets where we're displacing old copper. We talked about modernizing the network before. There's still a ton of DS0, DS1, DS3 type technologies out there that FWA easily can handle, and really they're at much lower bandwidth rates than, say, even consumer, right? I have DS0s out there, it's using nothing on the network, or DS1s even, it's only 1.5, right? So we could put these in, it becomes almost like a yield management game in how we use the spectrum. So we're finding all these different use cases for it, and it's pretty exciting. Our growth has been good.
We had our best quarter ever last quarter, did 160,000 nets on FWA, and as Joe builds more C-band out in the country, I just sell into it. So it's been really good, but... And we're finding new ways to even, you know, exploit it, so it's been awesome.
Would you ever proactively, it's kind of related to this, I mean, if you just have a few copper connections left, I mean, would you go out there and say, "Look, we're gonna move you over to wireless. We can give you an SLA, but we're shutting down the copper"?
I think that's what you're gonna start seeing. Throughout the United States, you're gonna start seeing a lot of, you know, LECs and CLECs, et cetera, but it just, it becomes, it becomes too costly to take care of the copper.
Right.
So that's why we've always been trying to move out of the copper and put Fios in. That's kind of the modernization we've been doing for the last 10 years. I think you'll see others do that, too, and our product can suit those folks, and you know, they can take the old copper out and put FWA in and continue business.
Are there other products that you're bundling in maybe that you hadn't bundled in, you know, previously? Like, you know, there's a whole range of security products now, right? And there's a whole range of new, you know, frankly, voice products.
Mm-hmm.
Well, obviously we touched on a whole range of new IoT products that are kind of, you know, coming up, but, you know, are you doing much on, on security or other products?
Yeah. So security, the security market is growing a lot. Our growth in security hasn't been that awesome, but we've just reorganized my security team to really double down on the areas that we see we can help customers. And there's some interesting things that we have going on that's too early to talk about. But I do see security being more of a growth for us, as opposed to just stagnant going forward. You see it every day, right? People are getting attacked. It gets more complicated to manage these things. And we have, you know, we have an interesting position that we see a lot of the data that transfers around the internet every day, and we see the attacks.
I think you probably are aware of our DBIR that we publish every year to give people insights on what the latest and, you know, is happening in terms of these things, and I think we can leverage that a little bit more than we have been. And really, frankly, honestly, Tim, that's why we've reorganized a little bit in, in the company inside the business unit, so we're more marketing driven, product focused. So, you know, we can make sure that the things that are gonna grow, we're making the right bets on, and things that are, are kind of going away or declining, we put less effort and emphasis on that, so we can put the money and resources against the things that we think are gonna grow. And security's gonna be one of them.
Any other areas of growth to think about?
I mean, listen, advanced comms, that's always kind of evolving, right? I think, but for right now, my big, my big thing is, is really the FWA, and how do we have wireless kind of take more of the, the connectivity pie over, over landline? So that's really where a lot of our focus is right now, and then really helping our customers. We spent a lot of time, like I said in the last year, we talked about the AI, how we're using it, really on our customer experience and how do we, how do we show up better for our customers in, in helping them with the, with, with their needs? And one would be managed services. You know, we did a deal with HCLTech last year. That's really working out well.
We're able to leverage their tech stack, and I'm not investing in it, but the partnership has been fantastic. We're driving business together, and what we're able to provide our customers in terms of new products and capabilities keeps growing. So, you know, that's just a kind of an example of how we're thinking about things over here.
What's actually included in the managed services?
Oh, well, listen, well, you have a worldwide network you need to manage? We will build it for you. We will manage it for you. We'll take care of it, if there's outages, all those kind of things. We'll update all of your... Say you have a bunch of CPE, we'll manage your CPE, make sure it's all on the up-to-date software. And then we do a lot of specialty things for different customers. Different customers, different needs, and we'll take care of that. So, and I think this could be another, you know, we talk about GenAI, it could be another opportunity for us to see some growth in the managed network area, because a lot of CIOs, they need to figure out how they're gonna leverage GenAI to help their business be more efficient.
They don't really necessarily need to be worrying about their networks. We can actually do that for them. You know, we have a Network as a Service, managed services, and you can, you know, you can give us a piece or the whole thing, and we can help you manage that so you can spend your time on GenAI and other things that are gonna help your customers and business.
Would you also manage, like, Wi-Fi access points or?
Absolutely
And all this? Well, like, you'll manage the full suite of enterprise networks.
Yep, yep, we'll manage everything. Well, rarely do we manage everything. We do have a couple customers where we manage everything. A lot, a lot of it's, you know, we manage 60%-70% of what the, you know, kind of what their needs are, and then they do a lot in-house.
Just out of curiosity, do you think Wi-Fi 6E and Wi-Fi 7 are a big deal? I mean, it seems like we're more than doubling the spectrum that's out there. Does it really matter at the end of the day?
I think it does matter. I think capacity always matters, for sure. But what we're finding with our private network offering is, people really like the idea of having dedicated spectrum for their use, and not having to share it, and not worry about, you know, things going wrong, and security. And I think also the ability to be able to move, like I talked about before, devices from a private network into the big network, and vice versa back and forth, is something that a lot of CIOs that we're talking to see value in. And really, they just feel they have more control, and it's more robust, right? So that's where we see things go.
But there's always a place for Wi-Fi, and there's always the more capacity you have, the better off things are, so.
When you're selling private network and they have dedicated spectrum, will you actually allocate the spectrum, or are you using more standalone technology, where you can kinda guarantee the, you know, throughput and the guaranteed capacity?
Well, no, we just use our own spectrum, so it's basically you put the radio gear and the antenna into the, say it's a warehouse. You put it in there, and they leverage our spectrum. And the thing that we just have to make sure of is, just like we do on any other cell site we have, that we're not interfering. So we have to engineer it, and then we turn it up, and then it's up to them. It's theirs to use. And we've done it not only in the United States, we've done it in Europe.
There's many countries over in Europe who made spectrum available for enterprises to use, and some of our customers have availed themselves of that spectrum, and then we've been the ones building the private network for them.
Now, do you think... I've always thought there's an opportunity for business customers in particular, where, you know, where I would pay $20 a month more to know that I have, like, a right to, you know, I have,
Right
... quality of service, right? That I have guaranteed access, maybe if the networks are congested. I know we do this in, you know, all sorts of different forms. But, you know, do you think there is a way with standalone or other technologies where you can start charging premiums for people that they have, you know, you can kinda give them better latency or, or throughputs or if they need to you know, download large files?
Yeah, I think, I think, I think that time will be coming. SA gives us the capability to, just as you say, it gives us the ability to kinda set the network up for certain users in a way that'll meet their SLA requirements. And in my world, that's what I would think would happen. You know, we have a lot of customers with SLA requirements. And we've been doing a lot of testing. I think the first area where we've been doing it is really in public safety, because we've done it with a few police departments around the country, 'cause that's where SA could kick in, and you need guaranteed, and you know, public servants need it in times of crisis.
And we can fire up SA, and they can get, we can live up to an SLA. So I think those are the kind of things, just as you described, that we'll be able to do, and I think we can monetize it. I think the tricky part there, in all candor, you gotta watch what you're doing, because the net neutrality stuff pops out, right? So, but in a use case for the police running their communication systems, that has nothing to do with the internet, so that's where SA can really shine.
Yeah, well, frankly, I hadn't thought about that angle, because I'm kinda like, every industry in the world, if you wanna get a premium product, you pay a premium price, right?
Yeah, we should send you to FCC, and you can talk to them about that.
Oh, a fair point. So I do have a couple of questions from the audience here, and I'll go back, 'cause I have plenty more. One question here: "Will the data explosion and also the propagation properties of C-band spectrum require a lot more network densification in the future?" I know you're not running that unit anymore, but that's the question.
No, but I mean, listen, they... I always tell the story. I remember when I first started in, like, 1980, in the 1980s, we built 75 cell sites, and we were sitting around like, "How many more of these things we need? Like, 10?" But now we're up to 100,000 or something. But the answer is, we're always gonna keep growing cell sites, because there's still areas that we don't serve, or we have coverage, or people are building in new areas, so we're gonna continue to build. And it's one of, you know, building cell sites and cell splitting is one of the tools in our chest to increase coverage and, frankly, increase capacity.
Millimeter Wave's certainly a great help, but you'll see us continue to build C-band sites, and just sites in general, so we can expand our footprint and coverage. And if we have areas where we might see some congestion, then, like the engineers always do, if they decide the best cost-efficient way to add the capacity is put a cell site in, well, that's what they do.
I was by the Port of Newark yesterday, and I was seeing the cranes kinda operating, and for one of the few times I've actually seen them. They're there sitting there all day, but I actually saw the containers kinda going up and down. You know, it seems to me over time that's something that's gonna be replaced by AI, although they'll automate a lot of those, you know-
Mm
... facilities. But you're gonna need a massive amount of network capacity to do that. So I guess, you know, how important is millimeter in your strategy for these private wireless networks?
I think millimeter. It's another tool in the tool chest, right? 'Cause it depends on the use case. So you see, and we, and some of our private networks are exactly that. They're ports, where they run, they're running on wireless. Some of them we have millimeter waves in, other we're using just C-band. So it depends on what the use case is for the particular, for the particular application. But you're exactly on it. We're, we just... And it's interesting, when we go into these private network deployments, like at ports or we've done some refineries and some other things, the people, they start off with a use case, and then they right away, once they start, we've, we've satisfied the first use case, they come up with 10 others that they can use.
'Cause think about it, you got a great wireless network that you can leverage to manage and run your operation, and you don't have cables all over the place. It's much easier to get devices on and off. It's much more flexible, and so that, that's why, that's why I'm bullish on private networks. I think we're probably a year, roughly, away from when I start seeing maybe more meaningful revenues, but I think it's gonna grow on itself, and before, like you said, IoT and things like this, is gonna drive it all.
Well, you've done a-
Automated.
You've done a phenomenal job on post-paid wireless phone ads. You know, it seems like you're constantly gaining share-
Mm-hmm
... really, really well. What's the secret sauce there?
I think it goes back to what I said before, the taking care of the customers, right? I mean, really, really understanding, and we can get better at it, but really understanding what they're trying to accomplish and partnering with them to accomplish what they need to accomplish for their end users and their customers, and really listening, then anticipating where the market's gonna go, and being there with the right product mix for them when they, when they need it, right? Right now, a lot of my customer base isn't even thinking about GenAI. They hear it on the news, but they're not even thinking about it. So we're sitting, that's why, once again, kind of retooling ourselves to be really more marketing-focused, product-driven. What are the things these people are gonna need in a year when they start thinking about it?
How do I meet them, and then how do I do it in a quality way? Listen, we're all about reliability, we're all about quality networks, we're all about taking care of the customer, and once people become our customers, they see that. And we're always trying to do a great job. We invest in the networks. They see that. And, you know, that's really it. It's down to reliable communications. A lot of these networks are running people's companies, and we take that very, very seriously.
Well, we're out of time. I really appreciate the conversation. It's gonna be an exciting couple of years, it really is, with all... It's gonna be some pretty major product upgrades.
There's a lot, there's a lot of tech, man, and, and choosing the right, choosing the right path is tricky, but also, you know, that's what makes it fun, right? Like, if we can, we can navigate this in a way that really helps our customers and leads to more profitability for us, that's the kind of the end goal.
Well, you know, frankly, as a former engineer, it's great having an engineer running the unit at this point in time in the evolution.
I appreciate that.
Good luck.
All right.
Thanks, Scott.
Thank you, Tim. Appreciate it.
Thank you, Scott. Bye, guys.