Hey, good morning, everybody. Welcome to the kickoff presentation, the Goldman Sachs Communications, Media & Tech Conference. I'm Jim Schneider. I'm the telecom analyst here at Goldman Sachs, and it's my pleasure to welcome Verizon and the CEO, Hans Vestberg, today. Thank you very much, Hans, for being here. We really appreciate it.
Thank you for having me. Great to be here. Early morning, West Coast.
It's true. It's true. Doesn't feel so early. So maybe just start with the headlines, Hans. Last week you announced the acquisition of Frontier Communications for $20 billion. That's going to expand your fiber footprint to 30 million fiber passings, by the time you plan to close the transaction in 2026. Very high level, give us the strategic rationale for the transaction, how does it fit into your overall strategy, and why this timing makes sense for you today, given that you owned some of these assets previously?
Yeah, let me start with a safe harbor. I might say something forward-looking, so you never know. When it comes to the Frontier, we announced that, yesterday or Wednesday last week. When I think about the Frontier acquisition, I think there's a couple of things that are really soon. First of all, it's straight into our strategy. I mean, we build a network once, we want to address as many profitable connections on top of one build of the network. So of course, adding this is just adding more customers. Secondly, it increase our TAM. We can address more customers with our current strategy, which means that we can sustain growth and continue to grow as we're doing right now.
And thirdly, I think, we also will have a great opportunity to continue to have both the best wireless network, the largest wireless network in the nation, and then also having an extremely good position on broadband in the country, which over time, depending on how customer sees it, of course, convergence come in there and possibilities for that. Those are the sort of three reasons. And you mentioned we owned this asset before. My predecessor did the right call. They sold them off, 2010 and 2015, mainly because they were only copper by then, and it was a big undertaking to transform into fiber. The Frontier team has done a great job. Today, over 55% of the revenue is coming from fiber.
More than 55% is coming from the profit on the EBITDA level. They have some 7 million passings already, so they have done a great job. We are actually bringing back a state-of-the-art. When we compare all the external KPIs like churn, penetration, ARPU, et cetera, they are very close to our Fios footprint. We know Fios is the best fiber operation in the country. There's a lot of things playing into it, and then, of course, economics is a very important piece of it. We looked at buy versus build, of course, and it was a pretty easy calculation, accretive from the acquisition day of the acquisition, both on revenue growth as well as EBITDA.
Maybe one year later on EPS and cash flow, mainly because we account a little bit different, and then we have some investment for IT systems. That's the only reason. So makes sense financially, strategically, operationally. Scale, our scale is going to be enormous. It's already number one on basically everything we're doing. Now we're just adding more strength to that.
Very good. So now, since,
That's a long answer. Sorry.
No, no, no, it wasn't. Some investors I've spoken to were trying to figure out a few different aspects of the transaction, so maybe we could talk about a few of these in turn.
Yes.
If we could. You've been quite bullish about the prospects for building and growing your fixed wireless footprint to much larger scale. How are you thinking about fixed wireless versus fiber as strategic priorities for Verizon? And why doesn't the increased emphasis on fiber with this deal mean there's some kind of pullback on the fixed wireless strategy?
So first of all, I think about the customers. I think that the optionality we create with the network, and some of you might remember when I came into Verizon, I started the Verizon Intelligent Edge Network, which basically is a fiberized, and unified, routing system. So basically, all the access is built on the same system. Adding then optionality at the edge of our customers, some customers just love fixed wireless access. It's by far the highest NPS we've ever had on a broadband product, and remember, then we have Fios. Because it's a self-install, it's so easy, so you need to have that in the portfolio. And then you need fiber, which is the best performing. So for us, we want to give optionality to our customers.
So doing the Frontier deal does not change anything in my appetite to continue with Fixed Wireless Access. I think it's just a unique product that is just competing well. Remember, when we deploy our capital for wireless, our number one priority is mobility. Then we get the secondary business case on the same radio base stations or the same radio technology, which is the Fixed Wireless Access. And that's how we do it today, and that's how we are creating or way over three million customers on Fixed Wireless Access today. And as I said before, when I come to four to five million Fixed Wireless Access customers, I will come back to the market and talk about our overall broadband strategy. And for anyone that can count, there's only days until we're there, probably.
And then I will come back and talk, in more general terms, how we continue with fixed wireless access, how we continue with broadband in general. But so I don't see that this is doing anything to my strategy on fixed wireless access. Again, it's all about seeing that you are meeting the customers. And remember, fixed wireless access is great for small and medium businesses, for enterprises or consumers, the same go for fiber.
... Very good. And then on the fiber strategy, maybe frame for us, your long-term ambitions in fiber, just to frame it for the audience. You know, cable has roughly 60 million or so passings. One of your competitors is talking about 40-45. And I guess, how big do you want to be? And look, to me, expect-
I usually don't talk so much about what I have in the future. I do what I have. But obviously, with the footprint of probably 60 million households on fixed wireless access, and when we close this deal, we estimate the Frontier deal will take some 18 months. They will almost be at 10 million, so we will have 30 million fiber passings as well at the moment. We're gonna have a very sizable, one of the most sizable, broadband networks in the country, probably the biggest. So, I think I'm gonna sort of, I stop there and think that that is a great first step for us. Then, of course, we will continue to be financially disciplined and continue to roll out. I mean, we started Fios in the East, 2004.
We're twenty years into fiber, but no one has been as long as we've been in fiber. We do four to five hundred thousand households every year, high penetration, good margins, and it takes some time to learn that and also make money on it. So, I think that we will continue to invest both in fiber and fixed wireless access going forward to create that optionality for our customers, and at the same time, having the nation's best wireless networks. That's sort of the whole strategy we have.
Very good. So maybe I want to shift focus a little bit and talk about, you know, the... Just for context, of course, this is the first presentation at a technology conference. We're gonna be hearing a lot about AI this week.
Yeah.
I think a lot of people-
We heard a lot about AI.
Exactly. Wouldn't immediately associate Verizon with AI, but I believe you have some initiatives in edge computing. You're doing some things in customer service and marketing automation as well, I believe. So give us a sense of, you know, the detail of what you're doing in those areas.
Yeah. So I would say my team is very advanced on AI. We have been on to AI for probably 10, 15 years. Of course, generative AI is coming now. So I see three areas. One is, on, let's say, efficiency for our customers. The second is for personalization for our customers, and the third one is for revenue generating, and let me just take them through. The first one is very much to simplify the process for our customers. Just imagine, I have over 100 million calls to my call center every year. We have some 800 data points on every call. When the calls come in, in milliseconds, we can define with very, very high probability, why is this customer calling? So I can route that to an agent that has the best capability to solve it.
What I do with that is two things: number one, the customer is gonna be way more happy because they're gonna solve it with the first iteration. Secondly, my employee, we're gonna be very happy because they get the call on something they know. We have already implemented that for 40,000 call agents today, and we have four of these really important use cases already deployed on generative AI. The other one that I can talk about is also on personalization. Given the amount of data we have on the customer, we can personalize the plans much better. I can give much better information to my sales reps in order to do it, all with enormous data lakes. Both of them have proven already after one quarter in market that efficiencies are enormous.
We cut minutes on calls. We improve the sale through quite dramatically on the personalization. So there we have a lot of things we're doing. Remember, we do them very clear target on the business case, on a certain sort of key journey for customer or for employees. So that's how we do it. On the revenue side, some of you remember that we were a little bit early out, or probably I was early out on mobile edge compute. 2018, I talked about it has to be edge computing, it has to be latency, throughput, and economics to do a lot of transformation at the edge of the network. We have seen that happening, probably not to the speed I was expecting.
I think what we're seeing right now in the conversation with all the larger players in the market is that Gen AI applications at the edge is going to be something going to be products. The main reason is that the transport cost, the security of that application, many enterprises want to keep their data very close to them. We have processing, compute, storage, power already built across the nation with our mobile edge compute. So, I think that no one in the telco world is better prepared than Verizon to be part of the sort of Gen AI edge compute of the time. And remember, we already have agreement with Apple, with Google, with Amazon, and Microsoft on mobile edge compute. So, this is for us.
We're just seeing that now the loads are coming. Probably it's gonna take some time because the majority of GenAI today is large language models that you're training, so they send them all the way back to the data centers. But as soon as they start doing like Verizon, it's an application that you use, then you want it closer to the customer because of transport costs, security, in some cases, in certain cases, latency.
Mm-hmm. And are you more excited about the revenue side or the cost side as an opportunity, and which one of them more meaningful for you?
I'm excited for everything. No, I'm excited for both sides and I'm genuinely excited for the employee experience and the customer experience I can improve. Then I have a choice. When I find the efficiency, what do I do with the efficiency? I can bring it to the bottom line, or I can try to sell more, or something like that. And that's where Sampath, my head of consumer, and I are debating sometimes, okay, if we gain five minutes on every call, are we then doing efficiency of it, taking the bottom line, or are we try to sell more instead? And that's a great conversation you have, and see that we are doing the right thing with efficiency coming out from GenAI. And I said, we're one...
Little bit more than one quarter in of these four applications, GenAI applications, that were deployed and more to come.
Maybe switching to a macro question for you. You know, the state of the U.S. consumer has been a big point of debate among investors lately, and, you as Verizon touch-
It's been, not lately, it's been for years talked about this.
For a while, maybe. You touch more consumers in your industry than any other company.
I have the largest direct-to-consumer business in the United States, yes.
Yeah. And so I think people would be interested in your view. What are you seeing from the U.S. consumer in terms of their propensity to still trade up and add more incremental services and other parts of the plan? Or are they seeing a propensity to trade down in certain cases? And I guess, are you seeing any of this show up in terms of credit delinquencies and the like?
So if we talk about consumer, wireless, consumer broadband in general, I think the last five years, something has first of all happened. I mean, the necessity to be connected with broadband and wireless is so critical. I mean, you have to have it. So of course, it's today is even higher in the hierarchy of priorities for consumers than it was five years, and definitely than ten years. So that's one thing that our industry is actually seeing. Secondly, Verizon has the highest quality consumers in the market. Clearly, the highest FICO score, you can see that on our ABS, enormously quality high. So those two you need to weigh in when you think about other industries and other consumer statements coming out.
And then finally, when it comes to delinquency and bad debt, I would say we see basically the same pattern as we saw before the COVID. Then remember, in COVID, we didn't disconnect anyone, so it was very different. You couldn't really compare it. But so it's very similar, but I think that our industry and Verizon is very different today than we were pre-COVID from a consumer point of view, and that's what we're seeing so far, and that's what I said when I came out from the second quarter as well, that we haven't seen any elevated bad debt. We still see upgrades and all sort of step-ups, et cetera.
We still believe that by year-end, we can reach 50% of all the consumer base having myPlan, which is sort of our premium offering right now, which is enormously quickly. Basically, in one and a half year, we go from zero customers on myPlan to 50% of the base, and we have the largest base in the country.
Yeah. Maybe switching to the consumer wireless business and digging into that, a little bit. I think one of the other topics that you've heard on investors' minds lately is the, topic of, Apple's upcoming iPhone announcement, which is-
Is it coming soon?
Perhaps.
Okay.
Expected to have AI features embedded.
Uh-huh.
So I guess, overall, what's your expectation around the success and of this and other AI smartphones this year? And I guess, relative to Verizon, you know, how do you think about consumers, their switching activity, and, you know, what that means for your ability to, you know, kind of retain those customers, and if you need to provide incentives or more subsidies to make that happen?
Yeah, we probably know in a couple of hours, of course, as the launch is coming today on the iPhone. What we've seen, a couple of things were important here when it comes to upgrading to next generation phones and all of that. We have seen, of course, a pattern now over the last couple of years, where customers, consumers, keep the phone longer and longer. We have gone from, I think it was 12 months, sometimes in the 1990s, that people changed their phone every year. Then it came to 24, then 36, now we're over 40 months. So people keep the phone because the quality is higher and it works really good. I guess that's partly because of the network is great.
So that's one thing, and then what we have seen historically is when you really see a surge of demand, has been two reasons. One, it's a 2G to 3G, 3G to 4G or 4G to 5G, a technology cycle. The second has been a hardware redesign that is very different from it. Those two has triggered historically. We have two, I would say, great AI phones in the market today, not mentioning names here, but two great. Haven't made a big change in the United States market so far anyhow, despite that. But, you know, I don't know. The only thing you can know that we have since 2022 been extremely financially disciplined, how we do promotions, to see that we're much more segmented.
We see that the customer is getting the value and the promotion they should have, not making a broad statement. So we will continue to be financially disciplined, but let's see what's going to happen. And also remember, when we are number one on wireless with large enterprises, government, and SMBs, they usually take N minus one, N minus two, meaning they never take the latest version. They are usually taking versions that are a little bit earlier. So, we're gonna see what's gonna happen, but you can bet on that we're gonna be financially disciplined in this process, as well as we have been.
We, as I said, when we came out for the second quarter, we are from a 2023, where upgrade was low. We're still double digits down this year in after the second quarter.
Very good. Maybe think about the wireless market very broadly for a second. You know, subscriber additions in the market have continued to defy expectations for a big slowdown. I think we've got four million net adds in the first half of this year alone, industry-wide, and so what are you seeing right now in terms of, you know, the overall kind of health of the market, growth additions, and are you still seeing healthy market momentum heading into year-end from what you can see today?
I think we see a third phase of wireless. There's going to be, of course, new customers coming in, but as immigration has gone down quite dramatically, there's less pool. A big part of the pool, when you talk about the four million, that's postpaid customers. They come. A big portion come from prepaid, so they're not new to wireless. They already have a phone. So, and that's the thinking I was doing and my team was doing in 2023, when we went through everything with consumer insights. And we designed myPlan, because ultimately, having a mobile plan is gonna be important. With flexibility, you can pick different type of plans, but also building a whole ecosystem around that, that's gonna be important to continue to have this fantastic recurrent business we have on service revenue.
And that's why we started with the streaming services. We started with inclusion. We learned that customer doesn't feel that is a value, at least some. "I don't want Disney+, why do you give me?" So that's why we started with the streaming services for $10 on top of it. On top of that, we have the f intech, where we have everything from credit cards to insurance, et cetera, as well as cloud services. And then on top of that, we have what we call my Access, where you can get access to premium experiences, getting access to tickets or concert before anybody else. And we're just starting. We're just one year into myPlan, and for the ones following us, we also launched my Home now, exactly the same on broadband.
You can pick whatever broadband configuration you want, if it's fiber or fixed wireless access. You take your streaming service on top of it, you have all the insurance, home insurance, credit cards, and then you have on top of that, my Access. That's how you need to think about this, I would say, great recurrent service revenue can do, with, I would say, fairly low churn. And that's how we build it, because the more of these services my customers have, the more, valued we are. Then at the same time, we rebranded or refreshed our brand, we used that word, in June to see that we have a brand that is reflecting where we're going as a customer, as a basis.
So always gonna be net adds, but it will be less net adds, and then you need to think how you build a proposition for customers over time. And I said, when we launched myPlan, I think the first two months, I mean, nobody took a perk. I mean, I was talking to my team, "We have misread this totally." But it was more us and the six, seven thousand stores we have, that needed to learn how we sell that, and that's why all this personalization come in, changing it in the back end. If you come into the store today, you can get Netflix for $10. It costs you $13.99, I guess, if you go direct to Netflix. We sort out everything in back end, as long as you remember your password.
That is the biggest problem for many. But if you have that, then we take care of it, and you are actually moving over to a perk with us for $10. It's just a totally new way of thinking how important this distribution channel is. And as Sampath, my CEO consumer said, "We don't do this as a nonprofit. We are making money on this, because we are taking away the cost of acquisition from the streaming guys, and we have, of course, the largest distribution in the country to direct the consumer, so you can use that." So I think that it's a long answer for net adds.
Net adds is gonna be there, but you need to think differently when you move here, and that's why we feel that, yeah, we are growing our service revenue now, and that's why we see we can continue to do that.
And you, like you said, you have over the last several quarters been improving your execution in the core wireless business. You mentioned myPlan. Maybe talk about some of the other components of that improvement, and if I think, you know, over the next, you know, several quarters, what's your level of confidence in you sort of getting to the target you set out this year of, you know, net positive net additions in postpaid phones, excluding the second lines? And do you have more confidence or less than you did before?
Yeah. No, so, as we changed management, I mean, we did quite a large transformation on the leadership team in, I think it was the first quarter of 2023. I would say there was only one person that kept their position in my management team, and that was the head of HR. I think the team has been performing fantastically. I mean, Sampath, on the consumer side, he has worked with operation, with the stores, with the offerings, much more on retention work, much more granular segmentation. And don't forget our value segment right now, our prepaid, that is also improving every quarter right now. We have clarified the different type of products we have, all the way from Total Wireless to Visible, to our Tracfone brand that we mainly have with the largest retailer in the country, called Walmart.
So we have clarified that, and we see the improvement. So there's a lot of things that we changed the incentives for our sales force in the stores, saw a direct correlation. So a lot of things has been done there. And we have said all year, we're gonna be positive on net adds in the consumer postpaid business, excluding the second line, and we feel good about that statement. The team is performing really good. I have to say, remember also our business side, they're adding 125-150 thousand net adds every quarter in between large enterprises, government, and SMBs, where we are number one in all three of them when it comes to market share. So the guys are doing a great job. But again, we will do it financial discipline.
We can solve net adds in two minutes by just throwing more money in the market, but we do it with the three KPIs that all the management, including myself, are measured on. Number one is the wireless service revenue growth. Number two is expansion on cash flow and EBITDA. That's the three KPIs we are measured on, and that the board and the market has told us that's what you're gonna focus on. That's why we're gonna do this in the right way, taking out costs, gradually improve, rather than do something that we don't think is long-term sustainable financially.
Very good. And then, you know, relative to that, I think, you know, wireless pricing in the market has been something that's maybe surprised some people. I think it's been in a relatively healthy place over the last several quarters.
Mm-hmm.
You and your other competitors in the market have taken some amount of price in recent quarters. Maybe just talk about you know how do you think about this on a prospective basis, and specifically, the amount of value you're adding to consumers, and you know what are you monitoring to determine whether you know you can take a little bit more price or a little bit less price, or if you've taken too much?
No, actually, first of all, any statements on new value proposition in the future, I will not do, because that's for competition. I wouldn't say what they're doing. But historically, if you look backwards, we have done a lot of value-enhancing proposition for our customers. Of course, trying to offer them to go to myPlan, which we think is a much richer plan, better network and all of that. So, and then we have had historically some price ups as well on all the legacy plans. Two reason, I mean, first of all, to get our customers to get the best.
Secondly, is also efficiency gain for us, because given that we have a lot of grandfather plans on the wireless in our base, it's really hard to be really good serving our customers on them. So we have thousands of different wireless plans, and if you call in, that's a nightmare on my call agents, where they probably have some 20,000 PDF files with different pricing plans we have committed to. Because remember, we inherit a lot when we created it. So if we can get out of some of them, it's gonna be a better way for us serving our customers.
Again, it's about serving our customers in a better way, but also, given the investments we're doing in the network, I mean, we bought spectrum for $52 billion, which is quite a sizable amount of money. And we actually are bringing that value to our customer. Mm-hmm.
Now from a competitive standpoint, your cable competitors have continued to add wireless subscribers in the market, but they also have a wholesale relationship with you, as a network provider. So, you know, how do you think of the cable companies as competitors, and as also a customer relationship? Do you expect them to be more aggressive than they have in the past? And how do you think about just sort of the overall kind of push and pull of that relationship?
It's a great question. I haven't much answer for you, but first of all, they are an important wholesale partner on the wireless side for us. I have said all the time, they're accretive to our bottom line. We're not losing. We're losing less than our fair share to their gains, which tells you that for us, it's a good business. That's about what I can say. We treat them as a really important large enterprise customers. Then we compete with them every day, and in our company, there are Chinese walls. I don't even know how they're performing, because I shouldn't, because me and my team are competing with this.
So we have a separate organization that deals with all the wholesale to Comcast and Charter and some others, in order to see that we are having integrity between us. So the only thing I know, we're accretive, it's important for our relationship with them, but we're also competing with them in other areas. Mm-hmm.
Maybe just returning to the topic of broadband for a second.
Mm-hmm.
Coming back to fixed wireless, as what we talked about before, you said that you'll provide the market with an update once you get the four-to-five million subscriber range, so I won't ask you about that. But just more broadly speaking, if you think about your investment priorities for fixed wireless over time, you know, traditionally, fixed wireless has kind of been, you know, underneath the core mobile business as a priority.
Yes.
But is there a point in time at which you may consider doing investments in the network exclusively for fixed wireless or expressly for that purpose?
Yeah. Right now, as you rightfully said, our investments in the network when it comes to wireless prioritize mobility. End of 2023, we pivot from our C-band deployment from doing coverage as many pops as possible. We passed to 150 million. Then Joe, our head of networks, and I decided, from now on, we deployed our wireless capital for the C-band in for two reasons: one, revenue opportunities, and two, customer satisfaction. There are movements in the market. People are moving from the east to the South, et cetera, and there are pockets where we need to do better. So that's a very different priority when it comes to deployment of capital but has turned out well for us because we see higher step-up rates where we have C-band.
We also see lower churn where we have C-band, and of course, we create the secondary business case with fixed wireless access. We will continue doing that and see that we're doing right for our customers, but we wanted it so widely spread as possible in the beginning. That's why I added the $10 billion on top of the ongoing CapEx in 2019 or 2020. I don't remember now, which we exhausted in two and a half years, but right now it's very different, and right now, priority is mobility. There might be a moment in the future where you say, "Hey, it's such a great demand for fixed wireless access here, so I'm gonna do the priority on fixed wireless access.
But and secondary, I get the mobility benefit. But right now, we build the network once. We want as many profitable connections on that one build, not doing separate builds. But again, I will, we will have the optionality, and we're creating optionality with fiber. We have the one fiber that we build to every big hub in the country. We have unified routing, we have unified transport, we have redundancy in the network, so we can handle all this data. I mean, we came out with a report, I think in February, during Super Bowl, that our network has grown 129% in five years. Yeah, of course, that's a lot. It's enormous, given the size we have. And then people usually ask about what is the bottlenecks, et cetera.
There can be some bottlenecks in some markets and some radios. But the big thing, if you don't have all this economics on your back end, your backhaul, your transport, that's gonna kill you with all the data coming in. So, and that we built right from the beginning because we understood that 5G would be so important when it comes to data load. And remember, the biggest application in the mobile network is streaming. Streaming will continue, but it will not grow as we've done now, because when we started, you had one streaming subscription, YouTube, or you had Netflix or something. Today, maybe three, four in average per household. That can go up, but it's only still twenty-four hours, and people still work and go to school. So, that means that it will not continue with that.
It's gonna be a little bit slower growth in the network as well. On top of that, we're adding a lot of 5G Advanced features in the software to manage the spectrum and the data loads better. So, and we still have a lot of spectrum that we're deploying. So all in all, tells you a little bit how I'm thinking about the network deployment and the capital we're deploying. We are in 12-13%, 12-13% capital intensity right now, which I think is the lowest in the world in the telco. But we love to be number one in everything we do.
We're gonna continue to be very efficient, but I always, always add that if I find things that can increase my TAM, I put it in my first priority on capital allocation business, and that's why we bought Frontier. So it hangs together what we're doing after a journey of seven years with a lot of things happening in the beginning, Yahoo, AOL, Tumblr, you name it, which we had to take off, and then we bought the Tracfone, we bought now Frontier and the spectrum. So I think with the team, where we are, we're in a really good place.
Great. Maybe just two more, if I can. One on conversion-
You can do whatever you want, actually.
Would love to understand kind of your view on this, because I think that everybody has a different view. We've seen what happened in Europe. I think you've previously clarified that you don't think that the US is going the way of Europe, but you've also said that you see better fiber, excuse me, better wireless market share in the areas where you have Fios today.
Yeah.
So maybe talk about kind of how you think this actually plays out in the U.S. from a convergence standpoint, and what synergies you see over the next five, ten years plus?
Yeah. Been a lot of talk about convergence. I think the proof of convergence is that Frontier is a standalone fiber company doing really well. They have good growth and EBITDA and growth on fiber. Fios has been a standalone as well, done really good. But what we see is, of course, that the combination with the customer having Fios or fixed wireless access together with a wireless offering, they have more services from us, and of course, they feel that is a bigger value, so they stay longer. So, our head of consumers say that maybe the churn is 40% to 50% lower of a combined customer. But it's not the convergence where you're, "Hey, I have two products, why don't I give you one product for free so you use the other?" No, we have owner's economics on both of them.
Both of them are great products, and there is some value if you have 40%-50% lower churn. It's value, and you can share the value with customers, but it's not that you discount one product for another. I think it's very different to Europe in the US. There are great products. Fixed wireless access, fiber, and the wireless products are state-of-the-art, high-quality products, and with everything we're building with myHome and myPlan, I think we're just adding to that opportunity for our customers. Clearly, there's gonna be convergence. We see that with customers. We are just increasing the TAM again for that convergence when we're gonna close with Frontier.
Great. And let me just end on sort of a capital allocation, but also a policy question, which is around spectrum.
Mm-hmm.
You know, you made a big bet on C-band.
Mm-hmm
Some time ago. You mentioned over $50 billion investment. You know, if you look, you know, right now, the FCC does not have spectrum auction authority.
No.
If you think about your needs as Verizon over the next 10 years or so, you know, what do you see as kind of like, you know, when does this start to, you know, get problematic for you, in terms of running out of spectrum? How do you think about your needs over time and, you know, what changes in U.S. government policy might you like to see in this regard?
I guess we never have been in a better position with spectrum as we are today. We have 1,600 megahertz on millimeter wave, 161 megahertz, mid-band across the nation, and then low-band. We always have had less spectrum than our competitors, always, and we always have better network. Now we have equal, so that tells you how great we're gonna be with it. When we bought the C-band, I stated in the press release, we bought. This is decades of spectrum we bought. That's why we said it. Unfortunately, right now, as I said, FCC doesn't have authority to even auction out. More importantly, there's no pipeline, and I think it's more important in the United States of America.
If United States of America will not have spectrum all the time coming in, harmonized with other countries, the competitiveness of the United States telecom sector and for all sectors, as we're embedded in everything that is happening in this country, that's gonna be challenging. So I think it's important for the government to, because it takes years before you start saying: We're gonna unleash this spectrum, we're gonna auction out. It's three, four years, five years, maybe, from the day you start. So if they don't start right now, it's gonna be a disadvantage to the United States over time, and I think they realize that.
Fantastic. Unfortunately, we're out of time, but thank you very much for being here, and thank you, Hans, for being here as it will kick off our conference. We appreciate it.
Thank you. Thank you, guys.