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Full Transcript

0m10s Speaker 0

Hello, and welcome to the two hundred and thirtieth 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 with me as always is Roger Antner. How are doing, Roger?

0m22s Speaker 1

Hey. I'm great.

0m24s Speaker 0

So, Roger, this week, we've got a great guest with us to talk about Verizon's new consumer connections report. We have the eponymous Sam Path, CEO of Verizon Consumer Group. Sam Path, welcome to the podcast.

0m35s Speaker 2

Gentlemen, how are you all doing today?

0m38s Speaker 1

Great. Terrific. So, Sam Path, I'm so excited. We're 230 episodes in, and you are the first guest who is here for the second time. Thank you for coming on the show again.

0m52s Speaker 1

You know, we wanna talk about the Verizon Consumer Connection Report that you released this week. Really great data. And we will link it in the show notes about the report. But what I would be really interested in is, you know, Verizon is a company of execution. How are you taking the data from the report and execute on that?

1m18s Speaker 2

First, guys, congratulations on 230 episodes. You know, in a world that is so noisy and people have such little attention span, doing something two hundred and thirty weeks, it's amazing. Huge congratulations, both of you.

1m31s Speaker 1

Thank you.

1m32s Speaker 2

We started the consumer connections report two years ago. We are in our third edition right now with the goal that we are America's largest network. More customers use us for connectivity than any other network. More consumers, more businesses, more governments, more agencies, more large enterprises use us. And that puts us in a unique position to understand trends in society and how people interact with technology and that can shape broader societal attitudes.

1m59s Speaker 2

That's our goal. The second goal is we use the insight to make our products better. Two big takeaways from this year's report that we've taken back very seriously and started working on it. First was smart family. More and more parents, including myself, are concerned and want to shape how kids interact with social, kids interact with technology early in their childhood.

2m25s Speaker 2

We have a Smart Family product, which basically came out of the research we did for the Consumer Connections Report. It's a great product, it's free, and parents can use it to keep an eye on their kids, which apps are they using, where are they, how much time they're spending on each app, who are they talking to, and it's a great product that came out of this. So we're starting to create new products based on customer needs. Interesting research this time, we found that Tumblr, Whisper, and Snapchat are the three apps parents are all worried about. So immediate impact in our business.

2m59s Speaker 2

The second area where we have used the consumer connection report is on our Wi Fi stack and technology. We now have the best in home Wi Fi setup, whether it's our main router, whether it's the extenders, because we found that you can get a gig connection to a home, a two gig connection to a home, but if your Wi Fi in the house is not great, it doesn't matter. So we invested time, and our routers are a little bigger, our extenders are a little bigger, but we made that trade off because customers were very clear. They're like, add two more inches or three inches to your router if you need to, but ensure that we have seamless connectivity every part of the house. So those were two immediate things we got busy with, But every time we find insights, we take it back to our business.

3m45s Speaker 1

And Sampath, we're seeing that in our data. First with children in wireless, we're surveying every year at least twice children about the wireless usage of their children, and we found that twenty seven percent of six year old kids have a cell phone. It's staggering. At 10, half of the kids have a phone. And so yes, parents want to be able to protect their kids from harmful content on the internet, without a doubt.

4m18s Speaker 1

And so it's great that you have a solution for that.

4m22s Speaker 2

Yeah. And it's important. Look, I think from from a safety perspective, from keeping connected, kids should have phones. But as running the largest carrier in America, I'll also tell you, I think parents need to be involved and have that conversation because kids, by definition, don't have the maturity we have. They may trust things they shouldn't trust.

4m40s Speaker 2

They may interact with people they shouldn't interact. So safety is the priority, and hence, the Smart Family product. And it's free. You know, we have a premium product, but the free product, which I use actually, does a lot of the things I needed for my kids.

4m54s Speaker 1

Yeah. And on the on the router side, so we survey every single week 4,000 wireless, 4,000 home Internet customers. And on the home Internet side, we ask every single week, every respondent what kind of experiences they have had and what kind of issues they've had with their Internet experience. And we asked them about if the Internet connection went down, if the WiFi connection was stable or not and dropped it. And we find that Verizon routers are significantly outperforming that of cable providers.

5m34s Speaker 1

It's like almost a two to one difference of how many more issues consumers are reporting to us, what they experience with cable versus versus Verizon.

5m45s Speaker 2

And we've been quite deliberate in designing the WiFi stack in our house. You know, Heather McDavid, who runs that group for us, has a lot of experience in that space. But adding more space for antennas, spacing them out well, ensuring they have the right power levels has led us to that. In fact, the vast, vast majority of our customers only use our routers and extenders. Very, very small, low single digit percentage use third party routers because they like what we have better.

6m13s Speaker 1

And if they would know the difference, they would regret it that they use their own routers. Because your routers, from what we can tell, are high quality routers that are not cheap. So it's like really an investment in your customers and in the experience.

6m28s Speaker 2

And Roger, we also have the Verizon Home app, which is a relatively new app for us, which basically gives you control of your home WiFi in your house. And I think I have found the best use case for that app. You know, my two boys, my two teenage boys are on the Second Floor of the house. That's where their bedroom is. And I can never get them to come down for dinner or lunch on time.

6m48s Speaker 1

So Now you turn off the Wi Fi?

6m50s Speaker 0

We turn off the Wi Fi, but I

6m51s Speaker 2

can only turn off their device. So the minute I turn off their device, I count five, four, three, two, one, and they yell and they come down. So I think that

7m1s Speaker 1

is That's genius. Right? That's genius. Good research results in superior customer experience when you put it to action. And a superior experience makes happier customers who are staying with you longer, happier customers who wanna bundle with you, right?

7m17s Speaker 1

And it's a virtuous cycle.

7m20s Speaker 2

And also, think, look, broader term, we are bringing the same obsession with execution and quality that we had in mobility into broadband. Our Fios product has the highest NPS. Very few people churn. It's kind of the gold standard in the world for how a broadband service to work. And we are bringing that same ethos and mindset for fixed wireless access.

7m41s Speaker 2

Because many people thought, you know, it was a transitional technology. It is a low end product. But what we've found is our premium customers, they take high end plans, and they really like the fixed wireless product. And we are bringing our twenty years of home fiber experience to that product and making it better every single day, whether it's self install, whether it's truck roll, whether it's extenders, whether it's monitoring during peak. So I think this portends well for us as we grow our market share in broadband, which is only 10% right now, but I think we have a huge upside in front of us on broadband market share.

8m16s Speaker 1

Yeah. We measure NPS across 16 dimensions when it comes to broadband. And FWA has higher NPS than fiber, has higher NPS than cable, has higher NPS than than DSL. And in our numbers, Verizon's FWA leads the pack. And it's interesting, part of it is a little bit of a self fulfilling prophecy, because you make it so easy to return the device when it doesn't work.

8m45s Speaker 2

Yes.

8m46s Speaker 1

You buy it, you take it home, it either works and you're happy, or you bring it back. And then you're happy unhappy with somebody else. But the people who have it, love it. And you know, if you're unhappy with whatever you have today, FWA is a great way to try out if you wanna replace it with that.

9m7s Speaker 2

Yeah. And we're getting better on our process, you know. You can of course buy the product anywhere in our stores, online, some of our partner stores as well. And look, the vast, vast majority love the product news. Look, there's a small proportion that doesn't work exactly for them, either they're in a multi dwelling unit or, you know there's something outside their window that blocks the signal.

9m27s Speaker 2

In those cases they return, they can go to any UPS store, they don't need a label, nothing, they just have to show the box, the UPS person will scan the back of the router and that's it, we are done. So we've taken a lot of friction out of the process and that helps.

9m42s Speaker 1

Yeah. And and then where you have fiber, you have the predictability with fiber where you know exactly what are you gonna get.

9m50s Speaker 2

Exactly.

9m51s Speaker 1

So what are other areas that you have looked at and where you have made progress?

9m56s Speaker 2

You know, another one for us is retail. You know, we operate close to 8,000 stores across all our brands. And what we are finding is, look, two thirds of our customers last year in '24 used the retail store to make transactions. And everyone says retail is dead. I think boring, poor execution, sloppy retail is dead.

10m15s Speaker 2

High quality, personalized experience with a local community feel, with a warm human to human interaction, retail is alive, kicking, growing, and we see a lot of opportunity in front of us. We want to be the neighborhood store. We want to be the local community store. So how do we take a large national brand like Verizon and make it more local so that people can relate to it? There is a broader theme in America, you know, as there's noise overall nationally, people may be divided, they may be polarized, people are looking to more certainty in their local neighborhoods.

10m48s Speaker 2

And I think that's the trend Verizon has played into really well. You know, we used to run a national retail structure. We run now 55 separate territories or markets where there's a leader who she or he runs that market for us. And we are localizing the experience, localized offers, languages, decoration in the store, music in the store. In Miami, we have some local artists come and do some really cute murals there.

11m12s Speaker 2

So I think retail is alive, but it depends on high touch, high experience, and a local flavor to it.

11m18s Speaker 1

And also what I think is important that Verizon has traditionally put a focus on not only the store as a point to sell, but also to provide support and to help people who have issues with their devices. And that, you know, has been really a significant differentiator for you.

11m38s Speaker 2

It has, Roger. And look, our stores do a really nice job. I do feel we have more opportunity there to make our stores both a service as well as sales center. I think we have opportunities. And we are in the process.

11m50s Speaker 2

We are giving our frontline store reps access to more tools, access to more privileges that they can solve customer problems there. I feel like 25, that's an area I'm gonna see even more improvement from where we are in '24.

12m4s Speaker 1

You're executing very well against your targets. Q four was a very strong quarter for you, and I'm looking forward to very strong performance in '25 from you.

12m15s Speaker 2

Roger, you sound like my boss Hans. He says the same thing to me. We had a plan. We've executed on the plan. I think when you step back, Roger, there are three things that we are focused on.

12m25s Speaker 2

One is on broadband, we are taking more than 50% of all the growth in the market. So we have 10% share, we'll grow that. On our prepaid business, it used to be a drag for us, it's now a growth opportunity. We will be the number one prepaid growth in 'twenty five and beyond. The third is on the postpaid side.

12m44s Speaker 2

With my home and my plan and our perks, We'll grow as fast as the market. I have opportunities to do better on volume. You saw that in '24, but '25 will grow on that foundation that we've built. That's it. Those three with the most flawless customer experience is my plan for '25 in a single page.

13m2s Speaker 1

Well, sounds like a plan, and maybe next year we can talk about it again of how that went. Samath, thank you very much for taking the time. Really, really appreciate it. Great report. Great strategy.

13m16s Speaker 1

Thank you.

13m17s Speaker 2

Thank you. I look forward to your three hundredth episode as well.

13m21s Speaker 1

Okay. Thank you. Bye bye.