Despite the cable mobile virtual network operators' (MVNO's) success with bundled offerings and heavily discounted wireless service plans, don’t expect Verizon to follow suit.
Speaking at the Goldman Sachs Communacopia + Technology Conference today, Verizon CEO Hans Vestberg dismissed the cable MVNO's strategy of offering free or discounted wireless service plans when bundled with broadband. “Low balling and discounting won’t help us,” he said, adding that the company recently ended its $25/mo. discounted pricing for its 5G Home FWA offering.
Of course, since two of the bigger cable MVNOs — Comcast’s Xfinity Mobile and Charter’s Spectrum Mobile — both run over Verizon’s network, Verizon does benefit from their use of the network. When asked how long those MVNO relationships will last, Vestberg declined to provide details of company's deals with the MVNOs citing legal constraints. However, he did say that any MVNO partnership will be beneficial to Verizon’s revenue and added that he expects any of Verizon’s partners to realize that as the network improves “they will have to pay for it.”
On the financial front, Verizon today declared a quarterly dividend of 66.50 cents per outstanding share, an increase of 1.25 cents per share from the previous quarter. This is the 17th consecutive year Verizon’s Board has approved a quarterly dividend increase. Vestberg said that the dividend is a result of the company’s “commitment to cash generation.”
Verizon’s announcement follows similar news from T-Mobile, which yesterday said it will pay a dividend for the first time in its history.
Consumer Group rebound?
Vestberg also praised the company’s customizable myPlan offering, that allows customers to select one of Verizon’s unlimited 5G plans and then add-on additional perks. “We are seeing good momentum,” he said about the myPlan strategy the company rolled out in mid-May.
Vestberg also said that the new myPlan rate plans coupled with the company’s restructuring of Verizon’s Consumer Group, which is now headed by Sowmyanarayan Sampath, is slowly resulting in some operational improvements. Nevertheless, the company’s consumer business in Q2 still reported 136,000 net postpaid losses.
Although Verizon has publicly stated its goal of attracting 4 million to 5 million FWA customers by 2025, Vestberg hinted that the number could go higher. He said that the company “internally” has higher targets and that the network is set to meet that demand.
He added that about two-thirds of Verizon’s FWA customers are also mobile customers. When asked why Verizon is focused more on delivering FWA broadband than selling fiber services to consumers like competitor AT&T, Vestberg said that FWA is a faster way to meet pent-up demand for broadband. “I can get fixed wireless to the customer tomorrow. Fiber takes time.”