Verizon CFO Talks Continued Subsidies, Not Buying Customers, and Upgrading 50 Million to 4G LTE

Verizon CFO, Fran “ShamWow” Shammo, sat down for the opening keynote of the Deutsche Bank Media, Internet and Telecom Conference and weighed in on all sorts of topics. Since we know how many of you are still Big Red customers, even with T-Mobile and AT&T shifting up strategies in order to grab your business, we thought you’d be interested in hearing what he had to say.

Shammo is always worth a few good quotes during his interviews. I don’t want to call him the new Sanjay Jha, because well, that would be a massive insult, but he sure knows how to grab a headline while talking to investors and analysts.

In his sit down today, he walked through everything from how Verizon wants “high creditworthy” customers for EDGE and how they don’t plan to leave the subsidy model any time soon, to how many millions of customers they still want to upgrade to 4G LTE and why his company likes having four major players in the wireless industry. 

On launching Verizon EDGE, but also keeping subsidies around, because they have “done wonders” for the industry:

And I think that if you look at this, it is another option for our customers. We are not going to force our customers into anything. It is really their decision. We believe that the subsidy model is an extremely good model. It has done wonders for us in this industry. So I think to abandon that I think is a mistake. But I do think that there are customers out there that want that installment sale. And obviously with our More Everything, what we did was when we really sat down and looked at it and studied it, we said, okay, we are going to have our subsidy model here we will overlay our Edge program here

On installment sales (EDGE), what happens when customers leave for another carrier, and having options:

And then probably if you look at history between the early termination fee and installment sale, and we know when customers leave your network for dissatisfaction the likelihood of them paying you your early termination fee is probably next to nil. So when a customer leaves for dissatisfaction on the installment sale, they’re not going to come back and give their phone back so they are probably not going to end up paying you.

So there is a lot of risk with the installment sale that has to be monitored. So I think as a carrier for us, we are approaching it, we’re giving our customers all the options. But we do require very high creditworthy customers to go on to our Edge program.

On how many customers still aren’t on 4G or smartphones (over half of their 100 million):

Well, it is pretty much. Because when you think about it almost a little over 50% of our customers there is about 25 million of our customer base out of 100 that are still on basic phones. There is another 26 million customers who still have a 3G device and haven’t converted to 4G. So you are talking about 50 million customers. So there is still a lot of base that we can convert to that 4G network that then they will experience the benefits
of the 4G network. And we already see that.

On why they won’t buy customers from other carriers (like T-Mobile and AT&T are trying to do):

So I think that where we stand is we are not going to buy customers. I think that you have to earn loyalty and loyalty is earned through providing a value package to your customers, making sure they get what they pay for. The network still is the number one reason why people leave you. It is not because of price. I mean there is price sensitivity in the marketplace that you have to respond to.

But the number one reason a customer leaves you is because of network quality. And I think that we just showed through Root and J.D. Powers again that we obviously have the best network. And that is what we built our brand on and we will continue to respond to our customers’ needs.

On Sprint and T-Mobile merging:

Yes. I think Lowell put it best, we are really happy with four competitors. Look, I mean, people will do what they do. I think the one thing I would say is that obviously spectrum would become a big play if there was a consolidation in the industry

To read the full transcript, hit up the source link below.

Via:  Verizon