Verizon Promotes Alfonso Villanueva and the FirstNet Race Heats Up

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the three hundred and seventh episode of the week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and

Roger Entner 0m19s

with me as always is Roger Entner. Roger, how are you doing?

Guest Speaker 0m22s

I'm good. How are you? I'm good. So we've got

Roger Entner 0m26s

a couple things to talk about today. The first thing, looks like there's more personnel changes or promotions, I should say, in Basking Ridge over at Verizon. You wanna tell us about it?

Guest Speaker 0m36s

Yeah. Sure. So Alfonso Villanueva became the permanent head of running the Verizon's consumer group. If we take a little bit back in when was it? January?

Guest Speaker 0m50s

Was it January? I don't know. Sampath abruptly left the building. And Sampath, by the way, is showing up at Zayo in a couple of weeks. And so we're gonna invite Sampath back, and I hope he will come.

Guest Speaker 1m4s

I think he will come. Anyway, so Sampath left the building after the Financial Times leaked that they were looking for a replacement. Alfonso stepped up, and Alfonso was brought into Verizon by Dan Schulman. And so Alfonso, not only chief transformation officer, but he always also running the consumer group. So he has been the one that turned Dan's vision into reality.

Guest Speaker 1m33s

And I think when we look at this, this comes at the heels of the other announcement during earnings that Dan Schulman's contract is on an auto renewal every year. So it's perfectly clear that Dan is going to stick around. Success proves everybody right, and the success is clear here. And Alfonso also deserves a lot of credit for that. It also closes like the search, the external search for a replacement, which when you're realistic, would always look like the heir apparent to Dan.

Guest Speaker 2m11s

So now the number two guy, when you look at revenue wise, is a confidant of Dan Schulman.

Roger Entner 2m17s

Right. They go back to their PayPal days together.

Guest Speaker 2m20s

And they go back to their PayPal days. Right? So, you know, Dan put a lot of trust in Alfonso, and he came through with flying colors. He has been the one that has actually done the real work there. And so that's the recognition of this, and it's kind of the closing of the chapter here.

Guest Speaker 2m36s

My expectation is Dan and Alfonso are here for the time being, and they are executing their plan. They're ambitious and they have a plan, right? Next quarter, they expect accounts to grow again, which is not an uncommon or which is not a common thing at Verizon. But I think with the simplicity plan, that's quite achievable.

Roger Entner 2m59s

Well, I think it's even more important now because the yard six have kind of changed. Right? I mean, seems to be moving towards ARPA, things of that nature. And I know we've talked quite a bit about the account growth piece as well over time.

Guest Speaker 3m11s

Yeah. But that's more the sign of a disease rather than than the sign of health. Right? I just posted something on like, you know, something that the carriers stopped telling you where I'm basically reconstructing the figures. Right?

Guest Speaker 3m26s

I don't know if I make a lot of friends with it, but I would say the carriers are generally happy about two thirds of what I write here, which is typically what I write about the other guys, where I'm reconstructing what they are trying to hide, which is fine. You know, they come to us because we know things that other people don't. And so here we share a little bit of that.

Roger Entner 3m46s

Right. I mean, I think you you can make an argument for ARPU or ARPA. The industry in general seems to be moving towards ARPA.

Guest Speaker 3m51s

Yeah. The industry is moving towards ARPA. In general, you can make the argument that in a mature industry like telecom, the unit parts are less relevant. Because Kellogg's and General Mills don't tell you how many boxes of cold flakes they shipped. Right?

Guest Speaker 4m10s

And I don't think Exxon tells you how many barrels of oil they ship. It's all about revenue and profitability. To a certain extent, we are benefiting from artifacts of the past where there was no profitability and the only thing good to talk about was like how many new customers they got, and thank God we only lost $5,000,000,000 instead of 5.5. Right? So nevertheless, they're very good to make the industry more transparent and see what's actually going on underneath the business.

Roger Entner 4m43s

Sure. I mean, like, if you make the argument that smartphones have reached terminal penetration, which I think is fair Yeah. Then how much you make on a per relationship basis is a relevant metric.

Guest Speaker 4m52s

And Apple went away from telling us how many iPhones they sold in given geographies, which, as I wrote in that piece, I'm very grateful for you taking away metrics. It justifies my living. It gives me a reason for existence. Right? So thank you.

Guest Speaker 5m9s

Right? I appreciate it. Because with the amount of survey work we do, you don't make us blind. You make everybody else blind, and thank you very much. You know, I'll be a guide dog for the blind.

Roger Entner 5m21s

Well, value is a function of scarcity. Right? So

Guest Speaker 5m24s

Exactly. And so if there is a scarcity of truth, come to us, and scarcity of insights. But yeah. So we have that.

Roger Entner 5m31s

Congratulations to Alfonso. Well deserved.

Guest Speaker 5m34s

Yes. Well deserved. Congratulations to Dan. Well deserved too.

Roger Entner 5m38s

Yep.

Guest Speaker 5m38s

And I'm glad that he's sticking around. Dan is a good guy. I really like him. He is probably gonna come on the show too, which will be exciting.

Roger Entner 5m47s

So that's some some news from Big Red. We also have some news from Big Blue Yes. Around FirstNet. Let's talk through that.

Guest Speaker 5m54s

Well, they announced that they have now a five g standalone core right ahead of the news from Big Magenta, you know, only a few days before Chris Sambar is starting at at T Mobile. What a coincidence.

Roger Entner 6m10s

Right. It's funny how those things work. Right?

Guest Speaker 6m12s

Funny how these things work. How timelines work out. AT and announced that they have a five g standalone core, and that they are transitioning customers who requested to come over on that five g standalone core.

Roger Entner 6m26s

So FirstNet already has their own, like, reserved spectral bands and things of that nature. So, like, what does five g SA give them?

Guest Speaker 6m34s

Well, so right now, on four g, they also share the radio resources, all of these things, but they have a standalone core. With five g, they can now sell slice all the way through and dedicate certain amount of spectrum, certain amount of resources throughout the thing. What it does, it allows them, from what I heard is that first responders are sick and tired to hear about slicing, which I can understand. My son is a first responder, and he has to slice through cloth to help people. But this is about use cases.

Guest Speaker 7m9s

What this allows them to do is to set aside certain amount of bandwidth and certain amount of latency for certain amount of applications. So they can make sure that if there is a first responder drone, that it has the appropriate amount of latency and the right amount of bandwidth. Whereas, if it's video, it's a lot more bandwidth and a lot less latency. And so they can marry now the right amount of network resources to the right application.

Roger Entner 7m41s

So it's advanced provisioning essentially for different use cases.

Guest Speaker 7m43s

Exactly. It's advanced provisioning. The first responders are getting significantly higher throughput on FirstNet than the regular AT&T customers. I did a live test, you know, with my son. We both went to a mall because I wanted to see where is the place where I know that there's congestion.

Guest Speaker 8m4s

Right? How about a mall? A mall on a Sunday afternoon with plenty of kids and teenagers. And my son was like five or six times faster than I was. Makes a difference.

Guest Speaker 8m16s

Makes a difference.

Roger Entner 8m17s

Particularly when when lives are along the line. Right? I mean, and that's Yeah. Exactly. Idea behind all this stuff.

Roger Entner 8m22s

Right?

Guest Speaker 8m22s

So Exactly. And so it will be very interesting to see, you know, with Chris, and we talked about him before, you know, with Chris having built and being a critical architect of the FirstNet network when he was at AT&T, he's now coming in, and he has key priority. And we have the battle here of the titans with Verizon, with T Mobile, and AT&T both having very good solutions with each their particular strength and weaknesses.

Roger Entner 8m53s

Yeah. So, I mean, I think it's interesting because t priority has had slicing for quite some time, but they haven't had a dedicated spectral band. And now AT&T also is gonna have slicing on their

Guest Speaker 9m3s

Yes.

Roger Entner 9m3s

First responder network with a dedicated spectral band.

Guest Speaker 9m7s

Yeah. And I was at the launch of t priority in New York City, and I expected there to have, like, a constant drumbeat of announcements coming from T Mobile. And it kind of was a great launch, and then there was a a thud. But not there wasn't even a thud. Right?

Guest Speaker 9m29s

Nothing came afterwards. And first responder capabilities is such a wonderful proof case for selling business. Because you can legitimately say, look, here we have a first responder network that trusts us when lives are on the line. You can trust us with your profit line or with your production line. You're gonna be fine.

Guest Speaker 9m52s

And that's such a nice flywheel where all of the carriers are gonna play that game a lot stronger and a lot harder.

Roger Entner 10m0s

Yep. Well, it'll be interesting to watch, because I think that AT&T and T Mobile have been kind of in different lanes as far as their capabilities up until now, and now they're kind of starting to move in on each other. So it should be interesting.

Guest Speaker 10m12s

Well, as I mentioned before on this episode, is a terrific executor. They didn't hire him for the status quo. Under Cali, she announced very regularly record quarters, and I was a little bit of a complicit because I asked questions. Right? And she doubled the numbers every quarter because the numbers were very small.

Guest Speaker 10m33s

If you knew the market, you knew they were growing from a very small base to a smaller base. And when you look at it, right, we run also these big surveys on business, and T Mobile has a lot of untapped demand in business, and they haven't tapped into it. And I think T Mobile recognized that, and that's why Chris Sambar is there.

Roger Entner 10m56s

Well, it's more stuff for us to keep an eye on, and I'm sure you'll have you'll have some questions for Chris the next time there's a there's a T Mobile earnings call, so we'll look forward to that as well.

Guest Speaker 11m5s

Yeah. Looking forward to it.

Roger Entner 11m7s

Alright. Thank you, Roger. We'll talk you next week.

Guest Speaker 11m9s

Thank you. Talk to you next week.