Thread regarding Verizon Communications Inc. layoffs

@kz Now that is a great breakdown. Thank you for explaining it so well.

@kx nope, they are cutting OpEx to artificially increase margins, EBITDA, and EPS. If you reduce OpEx while keeping CapEx the same, free cash for (FCF) will rise.

Large majority of FCF is used for paying ever increasing dividends and the huge debt service. And then a few nillions are burnt on stock buybacks so the price doesn't tank to please the investors and achieve exec's targets for fat bonuses, RSUs, etc. Then not much left will be then reinvested into business for potential growth..

VZ effectively became a dividend king but that is not a winning game because some big investment funds have a policy that the dividend must keep increasing otherwise the stock is not eligible for the fund to hold it. So if they dumped it, it would trigger a big sell off. Danny and Tonny obviously want to avoid that at all costs. That's why the dividend will keep increasing, further squeezing FCF.

So the only winning scenario long term is to increase earnings to have enough FCF to keep paying off the debt, dividend and have enough left to invest in the business.

@jj Thank you. I may be getting it now. Or at least better than I was. Do you think we are we cutting OpEx by cutting VTeamers to put more into CapEx to build a stronger foundation for the future?

@OP In order to increase capacity to meet the ever increasing demand for wireless data, you either have to build more cell sites in the high demand areas or you have to deploy additional spectrum to existing cell sites. Building cell sites is a risky, time consuming process and Verizon is slower than their competitors at it. Deploying additional spectrum is much faster.

Acquiring spectrum is a CapEx not an OpEx.

The reason Verizon paid substantially more than their competitors is they purchased spectrum is more populated and hence more valuable areas such as NY, Boston, etc…

The other factor is that Dish / Echostar was bidding up the price because otherwise they would have owed the FCC a penalty. Two “small businesses” created and owned by them had initially won this same spectrum in 2015 but failed to pay up because the FCC denied them the “small business” discount.

https://www.fierce-network.com/wireless/verizon-emerges-biggest-winner-aws-3-auction

@a5 Exactly why 5G home internet failed so miserably

@cm a simplified explanation will do. We bought it because we are d-mb not to "collect digital dust " or for 6g or 7g or to compete with x or att . But strictly because what we do here is make poor decisions like hiring hans or buying Vodafone , AOL, yahoo developing go90 blue jeans. The trucks we purchase every 10 years are garbage and cost us more in the long run. The fastenal experiment was a disaster. Even Our commercials are a waste of money they are terrible !!! Fortunately as d-mb as we are, our customers are actually worse and we somehow make money in spite of ourselves.

" We didn't buy anything to hoard and then sell to x, Nor did we buy anything that x needs so then they would have to buy us. Trust me if x wanted it they surely would of out bid us for it. We are not that savvy , we didn't all of a sudden outsmart anybody!!!"

Ah, Dan. Please, do enlighten me—because surely there's a masterstroke of logic I'm just too dense to grasp. Why buy it?. This is urban, and dense urban spectrum, where most of the areas are covered already, and do have capacity. Verizon won't even do an antenna mod these days, due to "lack of money" ... So, please, do share the "secret sauce." Some magical accounting voodoo? Or is this just a really, really expensive way to collect digital dust?

I think the execs are not sure what should be the next terrific opportunity to buy because they already bought them all (AOL, Yahoo, Blueajeans, etc.).

While figuring out what will be the next sh---y company to buy, they're are practicing burning cash for spectrum that will never bring generate any profit.

We didn't buy anything to hoard and then sell to x, Nor did we buy anything that x needs so then they would have to buy us. Trust me if x wanted it they surely would of out bid us for it. We are not that savvy , we didn't all of a sudden outsmart anybody!!!

@ab So Verizon is buying up as much air real estate as it can. To what end? What can they do with it if they don't have the people left to build the infrastructure needed? Or is the infrastructure built and Verizon doesn't need the people to maintain it? Maybe the company's value increases having low operational costs and a closet full of spectrum which would look really good to anyone looking to expand. Comes across like making the house look really good while hiding the dirty laundry before a realtor comes to show it. I guess the big question for those not laid off yet is who will we be working for when the dust settles.

So..think of it as Air Real Estate. And it's not just the Federal Govt getting money from this. It's the city, state, counties as well. New York alone cost Verizon $1billion for their airwaves. Mamdani for the win? Our Internet and cell phone bills are basically hidden taxes.

@a2 Gotta say, I have had many people ask why their Verizon 5G was so bad. I had no answer. All I knew was that I had no signal if I walked into a building or if the wind changed direction. It wasn't until the CEO change that I finally found out that millimeter wave was the cause.

@a2 Thank you. That is about what I was thinking. With all of the X deniers, it felt like we bought a lot of what X would need. An AVP even hinted at this a few weeks ago when he said X would need something terrestrial to be successful and we were positioning ourselves to have what X would need. But the words spectrum wasn't specifically mentioned. So we were like okay and what? We sell it to them piece by piece, rent it to them, sell it as a one and done network-in-a-box? All while living Thursday to Thursday not knowing if there will be another one.

The spectrum that they bought, is good, but not great. It is kinda more of the same of what they already have. Granted, it is not milimeter wave, which was a disaster - still is.
However, the amount they paid, is insane. I think they are hoarding it to sell it to X when the right time comes. Because today, they are not expanding or building anything at all.

Spectrum is way over my head so I would love to know this too. Just realized that may have been an unintentional pun since I assume spectrum is literally over my head.