Hans Vestberg, chairman and CEO of Verizon, told investors during its fourth-quarter earnings call on Jan. 23 that his team is excited by the pace of fixed wireless access (FWA) adoption.
“With fixed wireless access,” he said, “we’re expanding into new markets and proving the value of Verizon’s connectivity. Customers are finding strong reliability and speed in fixed wireless access, and that shows in our results, including a very strong Net Promoter Score.”
Verizon had 413,000 net additions to broadband in the fourth quarter, continuing their pace of over 400,000 broadband net adds per quarter for the fifth quarter in a row. The company’s fixed wireless access experienced steady growth and was responsible for 375,000 net adds in the fourth quarter.
Tony Skiadas, Verizon’s CFO, told investors during the call, “The growth trajectory for fixed wireless continues to be robust, and we are ahead of schedule to achieve our 4-5 million subscriber goal by year-end 2025.”
Verizon’s fiber optic internet, television, and telephone bundle Fios had 55,000 net adds for the quarter, down 4,000 year-over-year.
“We are pleased with the success of Fios,” said Skiadas, “with strong gross adds and retention, reflecting the quality and overall value of the product. We expect broadband subscriber momentum to extend into 2024 as we continue deployment of our C-Band spectrum, further expand our Fios footprint, and bring new products and offers to the market.”
In Q4, over 80% of Verizon’s consumer fixed wireless gross adds came from C-Band markets.
Skiadas added, “We launched C-Band in early 2022, and our fixed wireless success in the last two years reflects a strong demand for high-quality broadband and the strength and reliability of our product.”
For the entire year, Verizon saw more than 1.7 million broadband net adds: 1.5 million from FWA and 238,000 from Fios.
Financials
Version’s Q4 consolidated revenue was $35.1 billion, down 0.3% year-over-year, a change Skiadas attributed to the wireless equipment revenue, which was approximately 2% lower than the prior year as total postpaid upgrades declined by approximately 18%.
Total wireless revenue was reported at $19.4 billion, up 3.2% year-over-year, which is attributed to targeted pricing actions, growth in fixed wireless access, and an increased number of customers selecting premium unlimited plans.
Verizon reported a consolidated adjusted EBITDA in Q4 of $11.7 billion, a year-over-year decline of 0.6%, and a relatively flat year-over-year adjusted EBITDA margin of 33.2%. Adjusted EPS for Q4 was $1.08, down 9.2% year-over-year.
2024 Expectations
Version expects total wireless revenue to grow between 2-3.5% in 2024, driven in part by continued fixed access wireless subscriber growth, which Skiadas described as one of three tailwinds (along with pricing actions and an improving consumer business volume profile) that will be driving service revenue in 2024.
Regarding Affordable Connectivity Program (ACP) funding, Vestberg noted that their 2024 expectations are made under the assumption that ACP funding will remain intact, but there are plans in place if the funding goes away. He also reported that the majority of Verizon’s exposure on ACP is in their prepaid business, with Fios and postpaid wireless having minimal exposure to ACP.
Vestberg reports that Verizon’s priorities for 2024 are to grow wireless service revenue as well as expand adjusted EBITDA and free cash flow to facilitate meaningful debt reduction. He noted that Verizon’s capital allocation priorities will remain consistent, adding, “Entering 2024, Verizon stands ready to further unlock our performance potential at an accelerating rate. We now have all the assets—the best team in the business and a focus on continued operational excellence—to deliver even better results going forward.”
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