BW Talks with Verizon CEO Hans Vestberg

Verizon really at the center of it all. Well, that's exactly right, and I think it's fair to say that it's a brave new world, to say the least. And it raises the question to Hans Vestberg. He is the chairman and CEO of Verizon Communications here with us in New York. The question becomes, what is Verizon's place in this world that is as disrupted as we've probably ever seen it in terms of content and distribution. That's a

good question. I think that we have been thinking through this authority lost one and a half year where we think we should fit them in the whole equal system. I think we came out with a very strong desire to have a network of serve risk. I mean to bonus variason is a network. I mean we're a network of people on network or physical wireless network and wireline networks,

and and that's really what we're building. And we think in this era, in the next sort of generational technology transformation, we're going to find a really good spot in the network service. And I think that coming back to what you talked about when it comes to what we're doing on files, ultimately, what I want to do, I want to give optionality for our customers. I mean, we know all where this market is going and how our youngsters are consuming content. They we need to give them optionality

to actually pick and choose what they want. And that's what the Mix and Match on fires just doing right now. And that's why I'm on the wireless side. I work with companies like Disney Plus et cetera to give that optionality. And I think we're in a new brave world where we as leaders just need to understand we need to

see and listen to our customers daily unbundling. Why now is it us that you're seeing the numbers of people at certainly younger generation giving up linear TV and saying I want Netflack, Netflix, I want Apple TV, I want other things. How much of it was about that? It was, of course consumer insights, but it's also a fairly complex thing to do technology. Why it's what we're doing right now, meaning giving our customers the right to actually start choosing.

And of course the whole system is is built on that. You take five hundred shanners and that's what you have. We we we want to give our customers. These are the shanners I'm looking at, and I think that anyone in the industry is seeing the same when you see all the big broadcasters come with their streaming services, etcetera. So I don't think it's something different. It's just that we decided this is our time. And remember our strategy has been all the time that we are not going

into content. Others belong content, but we can park it with anyone. So in our case, this was very obvious way to do it. All right, So let's talk about this streaming services if we can for a minute, Because you've created some partnerships, notably with some of those big names that you mentioned. How do you create those? How do you pick and choose? Because from the content side, they while they're in the content business, all of them

come at it slightly differently. Amazon's coming at it differently than Netflix, than Apple, than Disney, than a network. So how do you choose? How do you create the right business? Exactly? This is super important in the in the in the network the service as will have. Of course we're sat down and thought about what do our customers want to have and what what companies are resonating with our values

and would really make something. Remember, we have the best network, whether I would say a fantastic brand, and we have a distribution and nobody else has when it comes to customers. That's what we come to the table. So I think that we can partner with anyone. I mean, if you looked at the last twelve months and were they made an exclusive with Apple Music. We didn't exclusive with Disney Plus, and we didn't exclusive with Amazon Web Services for our

five G mobile edge compute. And of course that's all the queensandands, and it's queen not the coincident that we end up we wanted. Then we have crafted business models we actually win win for both of us. And it's obvious that Disney plas are gaining a lot of new subscribers, we are getting loyalty and we give more to our customers, so it has to be win win. It's not like they are used on top of us. It has to

be an exchange of financials in between us. I think that Disney plus Apple Music and and Amazon are all happy with the setups, and we are happy well. So the top tier customers right get free access, whether it's UM, Apple Music or whether it's Disney. UM. What's the payoff for you? What are you seeing and are are there more partnerships coming? I think, first of all, the model we have is on the Disney plas and Apple Music. You get it free from the beginning, and then we

turn them into paying customers. And of course that model is that we have a lower cost in the beginning, then we get something back when they get paid. And we now know how many of our customers will be turning around because we have so good understanding of our customer base who wants it. So that's that's how we do it. And of course yes it might be more,

but I will do it exclusive. I will only do it with brands, and I really believe that he is sticking up to our values as well as for our customers. Are you seeing the payoff? Yet though I mean the music definitely, because that was a year agoes into launch these plus is is still in the infancy, even though we're extremely happy with it. And but you to talk about Disney about it because they are the one speaking about it. But we from Variation is also very happy.

But but with that, with the Apple, you're seeing folks that get this free service, they become a longer term customer. So it makes sense. Yes, all right, it makes a local sense. So let's talk about that Amazon deal because on the back end that enables a lot of things that are increasingly important on the distribution side, and just

on the technical side of the house. You're a technical guy at the end of the day, help us understand well, I mean that the titles you have said say it all in and of its own right, and I think it's notable. And we can talk about this a little bit later that there is a technical guy at the at the top of this company. But talk about the Amazon deal. We talk so much about the cloud and Amazon Web Services. What does that enable you to do?

This is extremely exciting and I spent or we spent almost one and a half year with Amazon to do this. So just to understand what we're doing with Amazon. We're bringing the cloud service out to the edge together with five G in order to give super low latens the enormous TROOPUT for applications being developed by developers. This cannot be done. This is the first time in the world

where actually we have seen that partnership. Amazon couldn't have done it by themselves because they don't have wireless five Verizon couldn't have done it by itself because we are not in clouds, we don't have cloud software. The combination of us can create something that is so transformative that today you basically as a developer, you can click on our first five YE edge side in Chicago and start developing an application for five G with low laties and

enormous TROOPUT. Of course it's a transformative, and of course we're one side right now. Think of us have hundreds of them, maybe thousands of them over time where you have big data centers maybe less than ten in the country. We can then give fire the experiences of low laities and low LAATENC is basically you're picking up on the Internet and get the facts back autonomous course, real time, a r VR, artificial sort of intelligence. All of that can be at the edge, and we have just seen

the start with it. So that's why we're so excited about this partnership and what we launched in December three of December. Yere so edge computing just for those who don't know, and I didn't know until I kind of a little bit of research, but it allows all those millions of connected devices to reach a data service much more quickly. That's why it's so important. It's also the

potential for something like a fortunllion dollar market. Do you foresee this Han's being a significant part of your business going forward. Remember when we outline our five strategy, I said that this is the first time in the history where I actually have four different business cases on the same infrastructure which are built once. First of all, the court goes down with the new technology, which is important because data growth all the time. I can do five

year home instead of doing five yet at home. I can do five yet at home. That's just an amazing opportunity for us. Secondly, five your mobility. You can go around with the five your phone and all of that, and then five your mobile age compute. So suddenly you have three four business case on the same infrastructure historically on three D and four YO was basically two at best. So yes, we see a great opportunity with this. And this is the just the first piece of a of

an idea about five mobile edge compute. You're going to see much more from us coming the years to come, for sure. So let's talk about five G. We spend a huge amount of time talking about I feel like every day that everybody around the ecosystem there is a sense that the move from four G t five G is much different than from two G, two three G and even three G to four G. How much of the promise has been delivered so far and what's to come and what's the timeline. I think that we aren't

remember when the design or five year was done. Um, the idea was, this is a wireless technology for industries and society. It was never thought it was of course thought that consumers will get the benefit. But from the beginning was how can you take away all the cables in the world and have the same performance as you advocate, but being much more agile, having new ways of doing it. That was the idea. So of course a lot of the things when I think about five D is that

four G has basically two capabilities, speed and troople. The phone is better every time you get a new generation in five these eight currencies you can back their optimization, low latency. I mean just one of the currencies that today I can connect hundred thousand devices per square kilometer. Two more, I can do one million, and it's not never gonna be one million people on a square kilometer. So it's done for devices, talking to devices, optimizing flow

for industries. So where do we're allway? I mean, the plan was actually to come out. We came out twenty eighteen. I think we're ahead of the game, but still from a consumer market where you just now starting to massively come into it. And as we have said this year, we're gonna launch twenty five D phones this year. So but then we was need to realize this market is probably and I'm not sure it's true, but I think

Apples have the highest market share in this market. So it becomes important that Apple has a five D phone because people are very, very loyal to their operating system. Apparently, I'm not playing a new phone and that's five exactly, and I think that many you think if you're an Apple user. I think that Samson has come out with fantastic five D phones already, but it's a little bit how it works between operating systems. So we help me a little bit more, a little specific about the role.

So how many cities this year? We haven't said that yet, but I promise you very soon we will tell you. I think that last year we said thirty, we made thirty one made fourteen NFL stadiums and four other arenas. We think that our five is so different from others because the performance on our millimeter way five is your extraordinary. Today, I get too big a bit per second in my phone.

If you have a Ford your phone, which you probably have over there, you probably have forty to fifty megabits per second on variation, which is the best network in the country. And here we're getting too gig. You cannot even imagine how much faster that is. Do you need the more mid band airwaves to expand? What do you need today? I have all the assets I need to deploy a nationwide and a millimet wave network. Over time. Of course, we're always look into all the other spectrums

we need in order to be more efficient. There's some options coming up. Yeah, there have been some announcement about it. I think that C Band we have said that that's an interesting spectrum because what it's most important with that is it's a global spectrum. Other countries are using that spectrum. Ultimately want roaming to work, so you take your phone wherever you are and the I your service will work.

That is a spectrum that is going to be fairly global to see then, so that's why it's fairly interesting to be part of it. We have many international customers who have international business. Our customers want to have their phone on the go. You said at the top of the conversation Hunts that you're in the network business and

describe that very well. You still do have some media properties though Yahoo, Her Post a o L. What's the strategy there, does that grow, does it expand organic acquisition? What happens there. It's a good question. I think that as as I came in and a new team came in, we started looking at the first decision we made that everyone works here, works with rights on and we need to find our commonalities. The first commonality we decided we

have one brand value that's trust and innovation. Doesn't matter if my engineers is Digg Industries with Fibrine here in New York City or they work for huff incomposed, trust and innovation is what my customers need to get from us. So that was very important decision for us because that also caterd what we should do with the Rise and Media Group today. We have all our over the top solutions, you know, finance, sport, entertainment, etcetera. Actually making a lot

of understanding for us where Compton come from. And secondly from my enterprise customer. With my advertising platform, right now, I can go to a customer and say that hey, I'm not the only can sell the connectivity in five G. I also had an advertising platform, So suddenly I have synities. From my sales point of view, I have technology synities because many of the Rise and Media groups and engineers

is working with five G today. So suddenly I feel that this is really fitting into a strategy that we have. But we're happy with assets. Up to the third quarter, they had done a fantastic job from coming from double d D decline to very very small decline, so they're doing good job. You've been very consistent about kind of swearing off some of those big deals. Is that still

the plate especially? Is that still the position that you're holding, especially as debt levels have come down, because at one point you're pretty interested. And I think one of the big TV companies, whether it was Charter or something else, was probably through before me then or the company. Yeah, yeah, no, I think that I and my team think that we have so much growth to be done in this technology change to fie D. We want to be focused on that.

We think we can create value for our shareholders, em police, customer society on the focus we'll have on the network. So I have actually explicitly said that linear content companies, I'm not interested in that. Because there was so much hang on our shares. Everybody was asking are you going to buy that three letter acronym or that three letter acronym? I said, no, we're not going to buy that. And

it's important for a company as well. When you formulated a new team, a new culture, and you go somewhere, it's very clear what you want to do and all. And that's why no, all right, so let's do a lot. So what would you buy? Because there are is there anything out there on the I think that what we are looking into and and we have we buy small companies, especially for the five year that can be part of our enterprise basins and things like that, but we haven't

bought anything large lately. On right now, I'm more focused on the execution. I think that many of our competitors are thinking about a lot of other stuff. Me and my team, we can come in every Monday morning and start thinking about how do we execute even better this week? All right, So let's a little rapid fire to end up this interview a little bit about your management style

and maybe how you view strategy going forward. The biggest existential threat to the company or the industry as the existential threat to the industry is hard as Sam and I think the technology is going to be more and more important for each and every person on this planet. So I don't think it's an exceptential threat to the English research. But if we don't think about customer and seeing that we get the customer optionality, that's an extension

threat for any business. I would say, what competitor do you most admire? And why I respect all my competitors. I pick and choose for whatever I want to take from them. But the bonus, there's no one that I think that is that's what I want to be or something. But I respect them all. Is there somebody outside your industry, though, that you really respect and you think, man, they just they get their mission, they understand things or their company culture.

So I think that there are many companies that have done a great job. And I think that where where I align most with other industry companies is the companies that actually have done as we are doing, including the society in part of our stractity and understanding the responsibility you have as a leader and as a company for doing right for employees, for society or customers and shareowners. Those companies, I think I have a lot of linement and and I do more business with those type of

companies because we feel that we have responsibility. If my counterpart feel the same, we can do businesses together as well as doing right. What's the best advice you've ever given? In who gave it? You've ever been given? In who gave it to you? To me? Oh, I get so many advice to sellect one of them. I think that somewhere in the beginning, I think that I got advised to to really see that I I support and help people that are above me. Below me and on the

side of me. I think that was important. I come from a competitive life. I was a sportsman, so basically I was extremely goal oriented, so people moved around me. Um. I learned quite quickly that I need to work with everyone and to be a good team leader. You are a sportsman and you have certainly your background has been in sports a lot. I mean you guys have as a company have expanded into that as well. So is

that too a significant part of the mission mission going forward? Yes, I think that we think that the technology and the fire the has such a bearing on the new experience that I want to have in sports venues. We want to have the same experience in the sports venue that you have at home, and actually you can give some even better in state and experience. You can only get that in five D because the unlimited spectrum. I have the uplink that I have to thousand, hundred thousand people

can send up the date. At the same time, virtual realities picked on cameras can only happen in five That's why we're into sports. That's why we're in the NFL, we're in the NBA. Were together with the baseball teams. We think that's important, all right, So I think I may hear the answer to this question. But if you did asking, well, if you didn't have this job, what job what you want? I have a feeling it might

be something in the sports. Absolutely no. I would love used to be around sports, leading sports teams or a big movement in sports. And that's why I joined the Swedish Olympic Committee. I had one mission in life. I wasn't going to get the Winter Olympics six or Sweden. I have to quit a little bit earlier because I got another job which was apparently a little bit more important.

But that would be what I do. And then of course working with you when I have spent half of my life already from the millionnim development goal, which is into the goal I mean the UN Foundation's board, to give back and see how technology can actually change the word in the next decade is so important to me. Inclusion for people, fairness, everybody can get education, health care from technology. The climate change, all of that technology are

helped with. And you guys are obviously last question. You're all about five g no doubt about it, and so is a lot of the world. When do we really see it invading our world where everything I think this year is going to be an important year for that. Okay, this year a dress for I really appreciate you spending some time of this. Thank you, Thank you very much,