Welcome everyone, to day three of our Communacopia and Technology Conference. Very excited to kick off this day's sessions with Hans Vestberg, the CEO of Verizon. Hans, thank you so much for being back here.
Thank you, Brett. Great to be here. Fantastic!
All right. I think I'm supposed to remind you, do your safe harbor?
Yeah, we have a safe harbor. Whatever I might say can be forward-looking, so be careful.
There was some news on the tape this morning. Why don't you fill in everybody who might have missed it?
Yeah, we did the press release very early this morning, and no, I think it comes back to our capital allocation, where I get lots of questions about it. We have a very clear capital allocation. I mean, first of all, we invest in our business. Secondly, we put our board in a position so they can continue to increase our dividend. And thirdly, we paid down our debt, and when that's gonna be finished, we have some thresholds for that, and then we will start doing buybacks. I think that what we announced this morning was that we announced a dividend going forward, which was the seventeenth year in a row that we increased our dividends. So we increased them roughly 2% again.
So I think that shows the commitment of our cash generation and the board's support for us to continue that journey. And we had a great cash flow in the first half of this year, where our payout ratio is coming down quite quickly right now. We were a little bit high last year, but always below 100. So that has helped us a lot. So that's what we communicated this morning. So we actually had the board meeting this morning before I came on the stage.
Great. Well, we appreciate the news.
Yeah, of course. I'd do anything for you.
Well, let's talk about what you're gonna do to keep the momentum going-
Yeah
at Verizon. I wanna start off with the consumer segment. So you've implemented a number of changes over the past year in order to drive improved operating trends within that segment. So that's included putting new segment leaders in place. You've implemented a regional operating structure, and we've seen some new plans-
Yeah
Come out of Verizon as well. What gives you confidence that the steps that you've taken here has positioned that segment to return to sustained revenue and EBITDA growth?
Yeah, it's a good question, and I have to say, we have definitely seen these operational improvements since we made a lot of changes in the company. I mean, I've said it publicly, and I'll say it again: We were not happy with our performance in the first half of 2022. I stepped in myself and ran consumer for a while there, and then we did a bunch of changes, not only with people, we also did with structure. First of all, I'm extremely happy about our great bench of people we have, because many of the position was filled within quite a for a long time. Joe Russo became the new head of networks. Sampath, that was running our business group, he took over the consumer group.
So many great moves with extremely experienced telecom people. Then on the consumer side, we had already decided somewhere in the third, fourth quarter, we need to be more segmented. We need to see that we're actually are meeting our customers in the right place. We also understood as a network of rolling out, we are now having a chance to be much more local in our both in our network deployment, but also in our how we address the market locally. So we regionalized both the network organization, we regionalized the consumer organization. And then, of course, we have been doing for, I would say, six months, consumer research, and then we launched myPlan in, I think it was May or something, time is flying here.
which is a totally new way for us to address our customers, where you basically the consumer can pick and choose the plan they want to have and the perks they want to have. The consumer research we had was very much about we want control, we want an efficient plan, but we want flexibility, and that's what we built into myPlan. And the beginning in myPlan, as you always do when you change the platform, somewhere in the May timeframe, of course, in the beginning, it was a little bit clunky, both for our organization and for our customers, but now we have a good momentum on it. Our customer likes it. Our organization has far easier to articulate the value of our perks and the network plans.
As you might follow us, we had from the beginning two unlimited plans. Now we have three. We added Unlimited Ultimate just a couple of days ago. That's how you see us working, how we segment, having optionality for our customers. We have more and more perks that is coming in for the $10, with value on the table using our distribution channel. A lot of things have been changed, and also we're working a lot with our distribution when it comes to our teams in our stores, associates, incentives. We see it's actually working for us. I'm encouraged by what the team is doing. I mean, as I said a couple of times, I have a lot of great ideas what I want to do in consumer.
It's just that Sampa is doing it quicker and faster than I did. So very happy with the team, very happy how they came in.
We saw evidence of that improved operational performance in the first half of the year. Your phone net adds were better year-over-year in the first half, relative to the first half-
Yeah
of last year, which is what you had targeted. Can you give us an update? Is that continuing into the third quarter? I know the question everyone's asking is: How long do you think it's gonna take to start growing that base again?
Yeah. No, I think that on the wireless business, we have constantly now, since three quarters, improved sequentially, and our job is to continue to do that. And we have good line of sight that we can sequentially do that. Our business side has constantly had 150,000 new net addition on wireless customers every quarter for, I think, four or five quarters right now. Very consistent, very strong, taking market share constantly. Our consumer division has come from very negative in the second quarter last year, and then from there on, we're moving on. We still were negative in the second quarter, and the only thing we have said is we want the consumer group to sequentially improve.
and that's what we're targeting, but that we will have positive as a group in the quarter. That's, of course, we were really targeting, because we have the business segment that is doing well. So, sequential improvements. We have good plans. We used to also have the Sunday Ticket, exclusive distribution, wireless on Sunday Ticket, together with YouTube TV, which again tells us that all these content aggregators, they would love to work with us because our distributions and how we're actually making money, both for them and for us.
All right, so let's move on to ARPA and ARPU.
Yes.
Over the past year or so, you've implemented a series of price increases that ended up being very effective tools for offsetting some of the inflationary cost pressures in the business, but also, I think, just to get some of the value captured-
Yeah
-for what the network was delivering. At this point, these rate adjustments have impacted a pretty significant chunk of your base. Inflationary pressures are easing. So a question we get is: What's Verizon's pricing strategy from here? How do you think about the drivers of ARPU and ARPA growth, and to what extent would that be an ability to keep moving price versus maybe moving people up the stack?
So it's basically a couple of things that is expanding our ARPA. And if you looked at our ARPA, it has actually grown quite significantly in the last 24 months. One has been, we have done some price increases on certain segments. Of course, one of them was to cover some of the inflation, but it was also to make simplicity for our customers. Because just imagine how many plans you have in a company like Verizon for the plans, et cetera. So it's simplicity for our customers, for our customer care to deal with. So it's also cost takeout when we are trying to get our customers moving to certain plans. So that will continue. I don't see that as a main driver right now, that we will have price increases.
There are gonna be segments we're gonna do it in, where we feel it's right. For example, we took away the discount on our fixed wireless access offering just recently, which you can say that increased the price. That we have part of. The other scores, that fixed wireless access and broadband in general, that's just quantity. We're getting new customers, that is helping our ARPA. Of course, we have our fair share. We're more than our fair share on business wireless, and we're now gradually also starting taking share on our consumer. At least we're losing less, and that should help us as well. Those three is helping the service revenue.
And then we're topping that with the perk system and all the distribution of different type of digital subscriptions that we have, and inclusions, where we have a good model with these guys to see that we are also getting incremental benefit from it when we are creating new Disney+ customers or ESPN or whichever Apple Music or Apple One.
Right. So, I mean, it sounds like you're confident that you can continue to drive ARPU, ARPA growth, in part because you can continue to get value for your service-
Yeah.
through the device and-
First of all, I think that mobility, broadband, and cloud is the most important infrastructure we're having in today's society, and it's not gonna be less important in the next 10 years. I mean, everyone needs, in our society, mobility, broadband, and cloud, and it's just growing in importance. So I see this as a great business to be into. It's less switchable or new customers because of immigration and things like that, but the product is just absolutely a necessity for anybody that has a job or doing private communication. So yes, I see that we have a lot of opportunities to continue to grow that.
The area that has been lacking for us is that on the consumer wireless, we have not been taking any new customers for a while, and now we see that gradually improving. All other vectors we're doing well with, and that's why we have increased our ARPA and our bottom line the last couple of years.
When you think about how you go to market and consumer in particular, you know, historically, your biggest competitive weapon has been your brand, which was based on your network, which for a very long time was so far ahead of your competitors, I don't even know who number two was. Your competitors have been working hard to catch up, and they've been making network more and more part of their brand identity. What gives you confidence that Verizon can reestablish your leadership, and I wouldn't say you lost it, but I would say-
Thank you.
-the lengthen-
We have not lost. We're number one by far.
The brand identity in 5G, and how does the early clearing of C-band and the ability to really lean into that capacity shape the way you're gonna go to market from here?
I think it's three things. I mean, it's the fiber we have in the ground. For some, remember, we've started building fiber 2018, where more than 60,000 route miles in, connecting all our network nodes. And sometimes it's underestimated. You need fiber from the data center to the edge of the network, in order to transport all the data. We have all economics on that. That's a key differentiator to get a seamless service for a business, small and medium, large enterprise, or a consumer. Secondly, it's the spectrum we have right now. I mean, we always have least spectrum in the market. We still don't have the most spectrum, but we always have gotten the best performance out of it. And right now, we've only deployed maybe 20%-25% of our C-band.
We still have 75% of the spectrum to come, and we already have proven that where we have C-band, we have better step-ups, we have lower churn, and we're creating fixed wireless access customers. So yes, I'm, I'm really excited with that. And finally, we have year-over-year proven that the engineers, the RF engineers, all Verizon, are absolutely the best in the industry. That combination and how it built our networks from 2017 in the Verizon Intelligent Edge Network will be a key difference. Think about how much things are moving out to the edge. All this discussion about AI, et cetera, has to sit at the edge...
If you have built a network that is fiberized, the unified transport, unified routing, and then you decide it's a five-year, four-year fiber to the last mile, you need a lot of things we have built over time. I'm confident we're gonna see so many use cases of processing and compute at the edge of the network, and that's where we come in. I'm feeling really confident about we are in the lead in the network, and the only thing I know for sure, we're just gonna extend it, given that I have so much more to go on my spectrum side.
I want to talk a bit about the competitive backdrop. That gets a lot of attention in the space.
Yeah.
You know, the cable operators, who are your partners, continue to win a growing share of wireless net adds, and they're increasingly doing this by offering attractively priced converged bundles of broadband and mobile, including free lines for a fairly lengthy promotional period. Before I get into talking about that, there's been a lot of debate about the nature of your relationship within that wholesale agreement with the cable company.
My nature of my relationship with them, it's good.
And-
It's a good relationship.
Why, in the wholesale agreement, including some uncertainty around whether it's really perpetual and whether you have scope to revisit pricing at some time, what can you actually say about this?
Yeah, I cannot say too much because any legal agreements are bound by NDAs and things like that. What I can say is that Verizon always do business that is good for us. It apparently is good for them as well, that's good. We have the best network, and it's a reason why they're so successful. Ultimately, my job is to see that we get the full value of anyone using our network. But ultimately, it goes back to our strategy. We build one network. The more revenue stream I have on it, it's a leverage model, and it's forward to the bottom line, and I improve my cash flow. If you look at the cash flow in the first half year from operations, almost $10 billion. So we're really creating a lot of cash flow.
But clearly, whatever we see in the future, we're gonna see that it's beneficial from a revenue point of view and a bottom-line preview for us in this partnership, which we do with any partnership. I mean, we wouldn't do an enterprise deal with anyone if we didn't don't make money on it. That's the nature of how we do deals. So, I feel good about it, and if the networks improves, I expecting that my partners are realizing that and understanding what they need to pay for it.
Fair point.
Yeah.
On the competitive, on the competitive market, just to come back to it, we get asked this a lot. You see, listen, the cable companies are using service pricing as a tool. DISH is trying to make a go at it through a distribution deal with Amazon. You know, why should investors have confidence that what seems like a fairly responsible, competitive environment right now couldn't become more difficult? And are we gonna see operators like Verizon pivot back to using aggressive price promos, which, as you know, is not really favorably viewed by investors?
No, no, I haven't done that much. I think you need to look at this industry over time, and I think that is important for investors. I mean, even though we talk about this as competition, and it should be competition, it should be tough. I mean, we should fight every day for our customers. If you look at the value creation when it comes to cash flow and EBITDA, it's actually been growing. I mean, we have been growing our company the last couple of years on cash flow and EBITDA and, in a very tough competition. I think the product that we have is so important, I think that we are so uniquely positioned to continue to capture that. So I think that's happening. And then, of course, they're coming in, MVNOs and competing, et cetera.
The good thing for us is that I own this economics on everything we're doing. I own my network, I own my fiber, I own my radios. I can do broadband, I can do fixed broadband, I can do fixed line broadband, I can do wireless. Everything is owned by us, which means that we have the owner's economics. Ultimately, I want to get the price that that I deserve from my customers, and discounting and lowballing will not help us. I think we should deserve the price we're getting, and we should give them, our customers, a really good service, and I think we're really doing it. We are improving in all facets as we're now coming out with the C-band as well.
So I feel good about the competition, and they can come up and down in different sequences of technology evolution, like 5G. Everybody's throwing himself off the 5G. Right now, we almost have 70% of all the consumer Verizon consumers have a 5G phone. I mean, so we have sort of that first, say, "Wow, I want the 5G phone," is sort of a little bit over as well. So that happens in every... It happened in 4G, happened in 3G, and now it's a little bit more mature, but it's gonna be competition. I feel good about that. I mean, we know how to compete, and we're gonna do it well. We're gonna continue to grow.
As you well know, I mean, our team short-term, long-term incentives is only set on three things: growing our service revenue, expanding our EBITDA and cash flow. That, and then it's hundreds of KPIs under that, which we measure every day, churn, Net Adds, loyalty, et cetera, brand recognition. But ultimately, those are the three we're driving the company on.
We'll talk about one of the things that is driving service revenue right now, which is your broadband business. You're adding about 400,000 broadband subscribers a quarter, the large majority of which are fixed wireless. I, I asked you this question last night at dinner. I said, "You know, if you were a cable company adding 400,000 broadband subs a quarter, you'd be the darling of the stock market.
Yeah.
People seem to be looking-
Apparently not yet.
What does the market misunderstand about the quality of this customer base you're adding?
I think that it, it's a novel technology. When we start talking about fixed wireless access, I remember the first conversation: It doesn't even work. Now, they have moved a little bit, "Okay, it's working." Hey, if you add 400,000 a quarter, it's working because ultimately, if my customer didn't like it, they would disconnect it. The NPS on fixed wireless access is sky high. It is up on Fios, and Fios, you know, is way the best fixed broadband in the country. And the reason is, of course, the simplicity of the product. It's working at home. You can have multiple computers, TVs ongoing at the same time.
So I think it's underestimated at the moment, but I think as we move on, on this pace, we've been on a pace on 400,000 right now for a while, and I think that pace we can continue to keep. It will ultimately, it's converting into service revenue. And remember, it's one network. I build the network once, it's the same radio base station serving the wireless consumer or the business consumer wireless and the fixed wireless access. It's not a separate network. That's a big difference on the leverage model that we have. And now we see when CapEx coming down as well, and we're adding more service revenue.
The cash flow we saw in the first half, and our CFO gracefully also gave an indication what we will do for the full year, about $17 billion, which is really strong. So I think, I think that's an underestimation at the moment, but let us continue. Let us show how great this product is and, how sticky it is. I think that's for us, but I think I'm really pleased with 400,000 new subscribers a quarter, as we've had for a while. And remember, Fios is also helping here. We're doing really good on Fios, even though that's a smaller portion of it.
Couldn't the fixed wireless momentum pick up more? I mean, if we think about the availability of it, it's actually only been available to about 40 million household-ish, and that's been because you've only had access to a portion of your C-band spectrum until essentially just right now.
Yeah.
So you not only have it available nationwide, you have more of it in the places where you already were offering fixed wireless. You know, how are you thinking about going to market with that product now? Because it seems like there's a lot of places you could bring that, that service to consumers.
Yeah, you're right. The C-band that we've deployed so far has been in urban areas because that's where we got the spectrum from the beginning, cleared from the satellite company. So that's where the fixed wireless access has been selling so well. So of course, the next swap, or the 75% of the... or the remainder of our spectrum are coming in two portions. One, we get more spectrum in the urban areas because we got just a piece of it in the beginning. The other was we get suburban and rural. And so we have not even started with fixed wireless access in many of those markets, which in some cases, is an even better opportunity for us, because that's more, I wouldn't say it's underserved, but it's, it's not great product to have out there.
So definitely, I see a great opportunity for us to continue this as we're rolling out. Of course, it's gonna be a little bit less opportunities in urban areas as we have exhausted some of them, and then we go suburban, and we go rural. So, as we've said all the time, we've said 4-5 million fixed wireless access customers by 2025 in our business plan and to the market. That's of course, internally, we have way higher targets, and the network is dimensioned for way higher numbers. So we're gonna push our teams.
One of the benefits-
We're gonna push my team.
Great. One of the benefits of having this product is that you can now offer a bundle of fixed connectivity and mobile connectivity in more places, and, you know, the cable companies have really leaned into that go-to-market. We've been talking about some form of convergence-
Yeah.
for 20+ years. What's your view on convergence? What does it mean to Verizon? Is it a product strategy, or do you see convergence as ultimately being a network strategy?
For me, I build the network once and again, and then I want as much revenue streams and connection as possible on top of it. Second, I need to think about what do my customer wants. If that's convenient for them to actually have the broadband and the wireless from Verizon, I have all the possibilities, given that I have all the economics on both of them. If people believe that convergence is at a discount to great products, and then you do it, that's not what I think. It's actually a convenience for my customer. It's actually an added value that they can have it, and then I can add in an iPad, a watch, and then I can add in some perks. Of course, the loyalty goes up quite dramatically. The more things you have with us, the churn comes down.
So there are, I think, merits for me doing convergence. Right now on the fixed wireless access, probably two-thirds of the customers are also mobile customers. On Fios, it's still very low, I would say, the convergence there. And the main reason is that also, historically, wireline and wireless has been separate in the company, and offerings has been separated. That we can do a little bit better in these days. So I think the market will decide. I don't think we'll end up in a Europe, which is extremely high. The good thing for us, for me, it's just an added value that customer takes more products from me. But it's not like, "Hey, let's discount, all of this and give, give something away to get something else." I have two great products. My broadband product, best in the market.
My wireless product is best in the market. So we're gonna offer that, and customers that take both of them, they can get perks, where they get savings on the table. That's how it work.
We heard something similar, actually, from John Stankey yesterday, in terms of thinking about it from a network standpoint, the idea you build a national fiber network, and you have different types of access technologies on the end of it. Effectively, what you're doing... I think a contrast here is that, you're leaning much more heavily into fixed wireless outside of your region-
Yeah.
Whereas AT&T is really focusing on fiber. Why are you leaning so hard into fixed wireless when you are probably the biggest operator of fiber optics in the U.S.?
I am. I capture customers. I think about customers. I get Fixed Wireless Access tomorrow. I get the customer now. If I'm gonna dig, the fiber is gonna take me three years with zoning. My customer doesn't wait for that. I take the customers right now. I have optionality later in the lifespan of Verizon to have other access technology if it seems to be the right one. But right now, it's a pent-up demand on broadband in the country. You take 400,000 a quarter. Hey, why stop and say that, "Hey, let's think about another access technology?" It seems like my customer loves it. So no, it's super clear for me. Do what the customer wants, then you're gonna do right for the company and for your shareholders, and that's what we're doing right now.
I'm gonna have optionality way down the road and say, "Hey, do I want to split the cell, or do I want fiber in this area instead for my fixed wireless access?" That's far out. Let's see that the customer gets the broadband that they want and gets it from Verizon. That's what I'm doing right now.
In other words, if you have a lot of traction with fixed wireless outside of your traditional landline region, you could decide at a certain point that the economics make sense to start putting fiber into that market.
Of course. I can, then I can split the cell and then say, "We have Super Bowl in San Francisco, having our fixed wireless access. Hey, if we split the cell, we can get even more." I don't think that any shareholder would say it's bad for us to grow and take even more customers. That's not in our plans now. We don't need to do it right now because the dimensioning and the capacity of the network will cover whatever we have talked about. It might be something way down the line where we have that choice. So I have choices. I built the network, so we have choices how to scale and do success based over time, but it's not in close proximity that we need to do it.
All right, so sticking with consumers, so we've talked about how you are a leader in mobile, how you're a share taker in broadband. I wanna talk about Verizon as a distribution channel.
Yeah.
You launched the +play marketplace last year. It's essentially a place where your customers can go to easily manage all their subscriptions. Can you maybe frame the opportunity that you see for Verizon to further monetize these extensive-
Mm.
customer relationships as a direct-to-consumer channel for others?
Yeah. No, this has turned out way better than we ever thought. I mean, when we decided that we shouldn't probably be in content, I think actually the decision the previous management did was the right one. It's, things changed in the company and the market changed, so we sold Yahoo! and AOL and all of that. But in that moment, we realized, hey, we are the biggest direct-to-consumer in this country. I mean, there might be some that is close to us. We can do billing on behalf, we have CRM, we know our customers better. Anyone that has the brand today want to do two things, going direct to consumer, and they want the service offering. All the assets we have, they don't have. And some might remember, we started with Apple Music, including them.
I think the success is pretty clear. Apple Music is the largest streaming service in the country. I think we had something to do with it. Disney+, they have been pretty clear on what we did for Disney+ and how that important was, and then we just continue. And then we launched the +play to be a place where our customers can manage all their subscriptions. We can do bundles that nobody else can do. On top of that, we have our perks system with the same things, but it's just an inclusion of your plans. But all is managed, et cetera, and I think it's a great opportunity for two reasons. One is, of course, the loyalty we create with our customers, because you get the better deal with us if you use the perks or the +play from us.
Secondly, it's also a revenue generator for us, because ultimately, if somebody wanna use my distribution, or Verizon's distribution, we need to have a cut from that. And that cut is, of course, something that's gonna be incremental bottom line for us. We're just in the beginning, and we see what's happening with all these digital services and direct consumer. It's just gonna create more opportunities for us. If we stay strategically where we are right now, I think that's gonna be great, and it's a lot of swirl in the market where it's going. I think it's clear customers are going more to direct-to-consumer products, consumer products want to be closer to the consumers. Verizon has a unique set of assets and competence to do that.
And you look at Sunday Ticket, I mean, we're exclusive with YouTube for a certain reason. They picked us because we're working more with sports fans than anybody else. We have the distribution, and we know how to do it.
Has this dispute between Charter and Disney created an opportunity for you to pick up some broadband customers that you can then offer a YouTube service to, for example?
Is it a dispute between them?
Yeah, I heard about it.
I don't know much about it, but I think that again, I have a great product with Fios in many of those markets and Fixed Wireless Access. And of course, we have seen this for quite a while, that especially on sports content, it's going in so many angles on streaming and linear at the same time. Again, it creates an opportunity for us. It creates an opportunity for us, and we will see that we work with all our partners. We work with all of them in order for them to be successful. But as customers change their behavior, we just need to change as an industry. So it's very simple. It's like you and me are looking at streaming today. 15 years ago, we didn't do it. It's just very natural.
Earlier, you reminded us about your outlook for declining CapEx-
Yeah
... as you move past, the C-band deployment, which has been a big call on your capital. And you, you've said this before, you expect capital intensity to be lower for a long period of time. The pushback we get from investors is, you know, that never actually happens. Telcos always find a reason to spend money. Why do you have so much confidence that the capital intensity will remain low, and as a result, the cash generation will improve?
Because I know and been part of building the network. That's why I know it. The reason I was hired was because I worked with a network, which I love. We have great people doing it, but we knew already in 2018 when I came in, that we needed to put in a lot of fiber in order to be able to handle all the traffic, which we did. We knew also that we start to build up Millimeter Wave to get the lowest cost per bit in the most urban places. And then we knew that when we bought the C-band, we need to bump it up because we need to get that C-band out as quickly as possible. All that is sort of done to part with, now is BAU. So that's where we come from.
I think we had almost $24 billion in 2022. This year, between $18 billion and $19 billion, it's an exact number of guidance there, but somewhere in between there. And then we say, after that, we'll come back to our BAU, that's gonna be $17 billion to $17.5 billion. Which is a very efficient, capital efficient for a telecom company. Let's give and take that we turn over $135 billion, and our CapEx is gonna be $17 billion to $17.5 billion. It's gonna be one of the lowest CapEx companies in the world in the telecoms. And we are committed to it. Joe, running networks, 100% committed to it, and we see it happening.
Still, we're gonna invest in C-band, still we're gonna do success with fiber, but it's just that, that hump that we needed in order to keep the, the best network in the world and in the U.S., needed that bump. That bump is over, and my commitment is clear. Our management's commitment is clear. That's why we increased the dividend this morning again, because I think the board feel confident that that's the way we're going.
Just to be clear, no change to the CapEx guidance for this year?
No.
Okay, um-
It's exactly the same that we've said since the beginning of the year.
Okay.
Just that there's so many numbers in my head, so I need to be clear on that.
All right. Sticking with capital allocation, obviously, you have a lot of confidence in the current cash, cash generation to raise the dividend. As if you do see the cash improve as you expect, you're gonna hit your deleveraging target in the next few years.
Yeah.
How would you look to evolve capital allocation at that point?
No, my goal is—it's a focus that we have to get down to maybe 2 to 2.5x net debt to EBITDA. And after that, we have said then we will definitely start considering buybacks. You can always say, "Okay, are you not buying something or M&A?" There are not many M&As in the market, and as we now have defined a very clear, I would say, core strategy, meaning the network, leveraging our our distribution and seeing that we work with all customer groups, where we're basically number one with all of them. That has led us to creating sort of the $48 billion in EBITDA a year that we're doing right now.
So I think we will get there, and that is a clear strategy and priority to have in our capital allocation.
Okay. Last question. There was an article a couple of weeks ago talking about looking for a CFO to succeed Tony. You'd indicated that you were gonna do that when you brought him on. I think it created some confusion around the duration of his role, your plans. Can you give us an update or just clarify anything?
Yeah, usually, I don't never comment on media speculation, but if you ever have run the company, you hire persons for the role, not for another role. So it's just a stupid article in that sense. Tony is doing a great job. Matt left us in the beginning of the second quarter. Tony is doing a great job. He's gonna be there. Over time, I'm looking, of course, to have a long-term solution, but right now, I have a great CFO that's doing a great job, and he has actually delivered for us great, and he's gonna be there for a while.
All right. That's a great place to end, Hans. Thanks for being here.
Thank you.