Verizon Communications Inc. (VZ) Earnings Call Transcript & Summary

Welcome to Cowen's second day of its virtual TMT Conference. For those who may not know, my name is Colby Synesael, and I'm the communication services and wireless analyst here at Cowen. For this fireside chat, we have Nicki Palmer who is the Chief Product Development Officer of Verizon. This fireside chat is expected to go 45 minutes. And for those who are aware, there's actually an opportunity for you to ask questions at the bottom of your screen, and that will come up on another screen that I have right next to me. And as we go, if you have any questions, please feel free to ask.

With that, why don't we begin? Nicki, thanks for being here. Appreciate it.

Thank you. Good to be here, Colby. Sorry, we can't be in person. Maybe next time.

I hope so. I guess, similar to last year, can you tell us what it is you do at Verizon? And as part of that, where you're spending most of your time?

Yes, sure, Colby. First, I'd mention our safe harbor statement, so I may be making forward-looking statements here, which are subject to risk and uncertainty. Okay. Back to the question on hand. My job as Chief Product Development officer for Verizon is to lead our technology and product development organization. That kind of stems back to the creation of what we call Verizon 2.0 when Hans Vestberg took the leadership position at Verizon, and we really were 2 separate units, right, a wireless and a wireline unit. We brought those units together. At that time, I was running the wireless network, and I know we knew each other back then, Colby. But when we brought them together, this thought of really maximizing the assets that we have in our portfolio, without regard to whether they were born on the wireless side or the wireline side or what type of platform it is, but to be able to pull them all together and elevate our ability to develop products more rapidly to meet consumer and enterprise business, and that was really at the forefront. So that's when I took the job. And basically, my team looks at new technologies. So we run the 5G labs, which you may be familiar with. I have a number of them. I think it's up to 7 now around the country, one out in London that we opened this year. And so we're encouraging the ecosystem. We are working with universities and small companies and start-ups to see what new tech is out there and how we could use that tech on our 5G network in particular. We also look at device technology, so that's part of my team. So what -- how do we think about the chipset evolution and marrying what happens in the devices with what's happening in the network and ensuring it all comes together at the right time for the benefit of consumers and businesses. And then, of course, we just got a big product development engine with -- that supports Fios customers, 5G home customers, consumer wireless, landline enterprise, traditional services and new services. So just a big engine with development resources all around the world. So that's the purview. It's a fantastic work, and it's a great time to be doing this work, to be honest.

A lot of stuff, exciting stuff. So I guess, just kind of following up on that. At a recent conference, Hans noted accelerating certain priorities in the company's strategy. As it relates to your fiefdom, I mean how has COVID-19 changed your strategy? Or back to that question and all the different things you just mentioned, where you're spending your time?

So the thought that I have of fiefdom is kind of cool. But beyond that, I would tell you that our 5G strategy has really not changed. Our network strategy has been solid and continues to focus on more fiber deployment deep into the network, new technologies based on a 5G RAN and accelerating it just as much as we can. Just to back up a second, there was a Forbes report that came out, I believe, yesterday that listed Verizon as the #1 top employer for its response to the COVID pandemic, which is, frankly, an amazing award if you think about just all the companies that are out there. But Hans, the leadership team as well as frontline employees, I mean, have just -- I couldn't be any more proud of what has occurred at this company in terms of employees just pivoting, in some cases, to new roles, where existing roles didn't really occur anymore. For example, retail store employees, when stores are closed, well, guess what? They quickly got retrained and were focused now on call center type work as one example. That happened like that. No layoffs or furloughs for any of our 135,000 people, which is pretty amazing. The sick leave policy and other support mechanisms for families and homeschooling and what we've done with our donations, over $55 million of donations to nonprofits and other ways to help our communities. So I could go on and on, but I just wanted to mention that because I think it's -- it really underpins the type of company that we are and the type of leaders...

More specifically from a product development perspective, does this push you to focus more, for example, on enterprise-oriented 5G? Does this make you feel like you need to shift more to focusing on home broadband and what you guys are intending to do there? Is it more about filling in the holes? You just did the BlueJeans acquisition, and you had to refocus your team to try and find things that you are recognizing you didn't have or it would be beneficial if you add it right now as opposed to maybe later on. Kind of how have you personally seen your priorities change?

Yes. So I think there's a mix. There's a mix between what really hasn't changed and some things that have. So what has not changed is the focus on building the network as quickly as we can, developing products and services on top of that network not just for consumers or just for enterprises but all of the above as fast as we can. And in terms of the builds and everything else I could talk about, but that is progressing. In fact, our first quarter build was -- exceeded our expectations for our build of 5G small cells. So when you think about with COVID, what I would say from my perspective is it's been very interesting because some of the solutions or ideas that we had in various stage of development all of a sudden became either proven out or disproven very, very quickly, and that's just based on how the whole world completely changed. And there were things they couldn't do, things they wanted to do more of, and luckily, we had some things right in the hopper that we could bring out quickly. One quick example of that is a small company we are working with called Bookful. Bookful takes content from authors and children's stories and animates it in an XR type of world, and we had been working with them. We thought it was very interesting. It might have some application to our consumer business. And trying just working through the process, we were excited about it. But then this happened. And all of a sudden, we said, well, wait a minute, this could be so valuable right now to families that are at home that are working with teachers and trying to educate their children at home. Here's a different and unique way that might make that fun. So just like that, we were able to bring it to market and add it to our package services that are offered to consumers. So again, that's a very small example, but there's a number like that where the situation presents, and it's like, well, geez, look what we have right on the shelf. And I think that's why in this world, I feel that having a variety of bets in a bunch of different places since this ecosystem and the capabilities of 5G are so transformative and so new still that you kind of -- we want to have our finger on the pulse in a lot of different areas, and so that's what we did.

I brought up BlueJeans, the video conferencing solution, to what you just completed the acquisition of. I mean, how does that fit within the company's product strategy? There's been talk about how that will intertwine with 5G. Just maybe a little bit more thoughts around that.

Yes. No, BlueJeans is a great company. We just closed that acquisition. And I have just been -- the more I get to know them, whether it was early on or through the due diligence and now as part of the team, the more excited I am about the possibilities and not just of having a world-class video conferencing and collaboration tool that competes and, frankly, wins against all the other tools that are out there. And I was joking with you earlier, Colby, that I think we've all become a bit more versed in the video conferencing etiquette and differences between the tools. But I can tell you, BlueJeans is really a top-notch tool. And by the way, its security, top-notch security on BlueJeans as well. But when we look at the enterprise portfolio, we know, for one, that our largest customers want to have choice, and they also have fairly strong opinions about some of the solutions that they want to provide internally. So we've always had that as a backstop to our product strategy for the enterprise businesses. So BlueJeans fits nicely into that. But when I look at it in terms of capabilities and road maps, there are so many things that we could do with an in-house tool like that. We can make it more integrated to our edge network, which will improve the overall experience. And on the -- so there's a lot of like basic network data center stuff that we are just beginning to plan, and we'll execute over the next year or so to make the product and -- for customers even that much more interesting. But there's also innovation. So a quick example. When COVID-19 hit and we had to shut our offices, obviously, some of our offices are these 5G labs, one of which is right there in New York City, in Chelsea. And these are great places where we can bring enterprise customers, universities, small start-ups. We have the 5G RAN there. We have mobile edge compute there. We have developers and technologies there. So it's a great place to kind of co-innovate and think big, and that's what we've been doing. It's been successful, very great for inner ecosystem development. So now the doors are closed. So what do you do? You really don't want all that work to stop, and it didn't have to stop. So very quickly, our team pivoted to launching a virtual 5G lab, and this is like an online place that you could go to. We've modeled it after plans that we actually had developed for our lab out in California. So it feels like you're in the lab. You're walking and navigating through the lab. There's QR codes that you can grab with your phone and animate 3D objects. There are videos. There are rooms you can go into. The point I want to make, though, is as great as that is, because we just launched it, it's even better now because we've worked on like a 3-week time frame with BlueJeans, and now they're part of that experience, too. So you have this very rich, interactive, conferencing experience that's powered by BlueJeans and the Verizon 5G labs that we are just starting to unlock the potential for...

So to your point, I mean you're embedding BlueJeans' technology into other things that you're already doing. It's not just about reselling BlueJeans as part of a broader product portfolio. It's about integrating that technology into solutions to what you are already moving to market.

No. That's exactly true. I mean the resale and the product is a key component because customers love it, and we like to provide full services to our enterprise customers. So it fits in well with the portfolio. But then you have the network synergies that we can create by -- listen, when you're BlueJeans, you buy network from whoever you can get it from, and they had a very solid way of evaluating network operators. But when you couple it with Verizon and our scale, we -- so there's a lot of opportunity to find the network as well...

You and I've talked about in the past about the potential for Verizon to move up the stack, and we've talked about things like your fleet management strategy and your connected city strategy and some of the acquisitions you've done, and now you're doing BlueJeans. I mean, is that still the intention to continue to move up the stack in certain areas and to have a Verizon solution set? And if so, does that mean that there's more technology-type acquisitions most likely in Verizon's future?

Yes. I think when we look at our M&A strategy, it's -- we call it sort of a tuck-in strategy. We have made acquisitions, BlueJeans being obviously the most recent and a fairly decent sized one, but we've also made some smaller ones. We picked up John, for example, which gave us some great volumetric video capabilities, which coupled well with what we already had internally because we believe that that's a big 5G use case and a growing area in the future. So we're doubling down on that, for example. Last year, we did some pretty significant security acquisitions, which bolstered an already powerful security portfolio that we had serving enterprise customers. So I think the ones that we're doing are very strategic. When we talk about MEC, there will be a place, I believe, for Verizon to have differentiated services on top of an edge platform that are uniquely Verizon's. They won't -- I don't think they will be -- there will be thousands of them because we're going to pick our spots, and that will be driven by customers' demand and what customers really want. Whether it's an on-site MEC private MEC or more of a public MEC, there will be, I believe, a spot for us to go up the stack, as you say, and provide a more integrated solution just above the network. It won't be everywhere. I mean, listen, network is our strength. It's our core. You can see it in our investment strategy. We upped, as I'm sure you're familiar, our CapEx this year in the midst of all this, another $500 million, but that's because we know that these networks are critical infrastructure, and we are a network company, probably the best network company in the world. So we're going to continue to double down our network, but there are places that our customers, frankly, will lead us and say, "Hey, we -- our brand is trust and innovation." So when you have enterprise customers trusting you and you're an innovative company, there will be places where we can make those bets and they will pay off.

So we've used the term MEC a few times already. So why don't we kind of go further into that? So we recently published a report on the edge where we noted, we believe, Verizon has the opportunity to lead in edge as part of your true 5G strategy. One such area is around public and private MECs. And I guess just to start, can you describe for the audience what is a MEC?

Right. So MEC, mobile edge computer or mobile edge access compute, depends on what -- how you want to read it. But basically, it's bringing the power of the cloud much, much closer to the end-user, whether that end-user is a business or whether it's a consumer in the mobile world. So all of that, ultra-low latency, the energy efficiency, all the 5G currencies that customers are frankly enjoying today with our 5G network just get even more powerful as that capability is pushed to the edge. Remember, 5G is awesome as it is, and I'll continue to talk about how awesome it is. It is a RAN technology at its core. So you have a bunch of network that is behind the radio access network. And 5G technology does spec out what some of the rest of that network should be, but the latency capabilities of the AirLink are just that, the AirLink. So the more you can move the compute and the store -- storage resources closer to where the data is created and needing to be accessed, the more powerful solutions you can get in a real-time manner. So I think your -- most of your investors probably know a little bit about why that would be important. We certainly think it is, which is why we announced, for example, world's first big partnership with AWS, to have customers use AWS cloud in our -- what we call our SAP locations, our distributed node locations. And then enterprises can work to develop these latency-sensitive applications at scale. So that's really the key. And we see many use cases here across retail, manufacturing, gaming in the consumer space and pretty much every vertical, to be honest.

So you just talked about this, but last December, you announced the world's first MEC with a partnership with AWS for their Wavelength's product. I guess what is that you're doing with AWS? And what are the early learnings? I mean, like can you make it more tangential, so that we could kind of start to frame out? Like I understand what Wavelength is. I understand what a MEC is, but I don't quite understand exactly what you're doing. Like I know you have, for example -- you guys announced you're doing stuff with Bethesda gaming and the NFL. I mean, what is it you're doing that you needed AWS Wavelength and they needed you to make that happen?

Yes. Well, I mean, this is about 2 very powerful brands that enterprise customers use today. We build clouds. We have our own network riding on the cloud. But we are not normally in the business of selling cloud services at the scale that AWS is, for example, to end-users. And AWS, who is #1 in that market, is not really in the business of providing networking solutions to the extent that we are. So I mean, those are sort of obvious comments, but that's why this agreement and our relationship really makes sense to accelerate the benefits, again, to enterprise customers. And don't forget consumers, too. Because in the Bethesda example, that's really a B2B2C type of play. So Amazon does bring this vast array of developers that are, frankly, chomping at the bit to be able to develop services without having to handicap their code or workaround for latency and lack of speed in the wireless network, but now can say, "Whoa, like I can develop these applications with this type of performance characteristics in mind." So I mean, that's pretty powerful. And with the Bethesda gaming, that's really exactly what it is. So how do you bring mobile gaming today, and I don't know if you do any. I finally had to do it just to keep up with my son. And it's actually is fun, don't love the shoot them up part, but the other parts are pretty good. But the mobile experience is nowhere near what you can get off a connected PC or a gaming station. It just is not. And by reducing latency and improving throughput and having game-makers like Bethesda, understanding that that's the characteristics that they can design to, it opens up a whole new audience and a whole new type of gaming experience. So that's pretty exciting. That's what we're learning with them. We've got a partnership with Walmart as well. So that's to enable remote patient monitoring, providing some real-time doctor interaction. Wall Street Journal actually wrote an article upon what they're doing with us. And once we have 5G in these Walmart locations, they could draw shoppers in for different medical treatment services. They can have camera alerts for shoplifters. They can have streaming, [ inventory computer ] vision on stock-outs and the -- I mean, the possibilities are really endless for retail.

So one of the things that I don't fully understand is, for example, with AWS. So if AWS builds out in your MEC in Chicago, is the thought that they'll also need to build out in AT&T, they'll have to build out in T-Mobile? I mean, if -- for example, Bethesda is one of the customers that's using that AWS platform to serve out to their end constituents, is it only working, for example, for those that are on a Verizon device? Does AWS then have to go and do the same thing in...

Well, yes. Is there anything wrong with that? I mean...

No. I don't think so at all. I'm a Verizon customer, but I'm just curious for everyone else.

No. I mean, listen, what they have to do or will do or I can't comment on any of that. I can just comment that we're the largest wireless provider, the most reliable and by the way, the fastest, again. Another announcement just came out on award yesterday. So I mean, I'm not blind to the fact that there are other providers and competitors out there. It's a very competitive marketplace. But at the same time, there is also room and always has been, I think, for differentiation. And we like to have first-mover advantage, and this is a place where we've done it again. So we're out there. We're out there early. We're going to keep developing. I'm not so worried about what everybody else does. I don't think they have to. So we're just going to keep going and developing services, and we'll see what they do.

You mentioned this a bit as well. But in March, the Wall Street Journal noted a 5G partnership with Walmart, and Hans have confirmed Verizon is building on a private MEC for them. And another with Corning in North Carolina. I guess to start, what's the difference between a public and a private MEC? I don't know if I fully understand that.

Yes. I think the way to think about that is a public MEC is -- would be this partnership, for example, with AWS. We would place AWS equipment in our distribution locations or our SAP sites. And you can think of -- to cover the U.S., we've got 50-ish of those, okay? So it's not a cell site level or even a C-RAN level. It's a one step back, and these are the locations that usually have very good high-speed access to Internet.

Yes, and that is signaling access point, correct?

You got it. So -- and we're committed to doing 10 of those this year. So we're well on the way to getting that done. And that provides a certain characteristic in the network in terms of latency. The private MEC would not be public. It would be for a particular customer. So for example, we talked a little bit about Walmart. Corning is another great example. We announced an arrangement with Corning where we will build a private MEC, which just means again our network fully connected out to their locations and in this case, for Corning, manufacturing locations, where we will put the compute store infrastructure in their location.

I would think for someone like Verizon, there's a much better opportunity on the private MEC side, and I'll give you my thoughts and then you could tell me why I'm wrong. But I would think that for the public MEC side, it's going to make more sense for an AWS or Azure or any of those cloud companies to be in a more neutral location going back to my original question about do they have to build in Verizon or T-Mobile or AT&T. But I would think for private MECs, particularly because of the enterprise relationships which Verizon already has, and to the extent that these enterprises want to build private solutions like what you're doing with some of these companies already, it just seems like that's a more natural place where I would be able to see Verizon not only play but be very dominant.

Well, we think so. I would not say it's one at the exclusion of others. We're very bullish on the private MEC side and for the reasons, frankly, that you mentioned. We have existing relationships that are trusted, and our customers are looking for the next level of innovation, which really means, again -- depending on the customer, it can mean a lot of different things. But it could mean further automation on a factory floor. It could mean predictive maintenance, industrial robotic control, all of those types of things, which are not new concepts. The new concept is really, if you do it in a 5G world, you're now removing wires. You're now making things to react in real-time, and again, that's where the power of the cloud on-site really comes into play. So I agree with you. We're very excited about this marketplace, which is why we were early out with some of these announcements, and we're going in. We're going to make them work and learn and keep going.

Well, you think -- you mentioned Walmart, obviously, a very big company. Is there a clear strategy with them? Like they're going to use it for -- explicitly, you mentioned some things, whether it's for the health care component or for theft in trying to -- prevention. Do they know exactly what they're going to use this private MEC for? Or are they saying, you know what, this is really interesting, let's put it in one location and let's play around and see what we can do. I mean -- and where I'm going with this is going to be my next question here is, is this a real revenue opportunity yet for Verizon? Are we still on the let's tinker around and see what we can do with this?

Well, I would say we're somewhere in between. I mean, we're well beyond the tinkering phase. We would not put investment and equipment into a large customer location without having a sense of what we're doing. So stuff is tested in the labs. The architecture is done. So there's many stages to these types of deployments. But to say that we are in widespread deployment and the cash registers ringing off the hook, that's 2022. So we're really somewhere in between. But the way we look at it is this is a natural extension of our network leadership with the customers that we do business with. There are clear use cases that can take advantage of this step-function change in network capabilities. So it's about harnessing those changes, applying them to use cases. And with every engagement, whether it's Walmart or Corning or frankly, New York Times or the NFL, I mean, there's many, many of these.

I mean, at that point, I mean...

We've got a list, Colby, that says, here are -- it starts with brain storming. Like here's the pain points and here's the capabilities of the network and how do you work it through. But I mean it's well beyond brainstorming.

So I mean, and to that point, Hans has said it. You just said it, this is expected to be a more meaningful revenue generator or contributor starting in 2022. I mean, I guess what gives you guys that confidence that 2022 is the right year? Why isn't '21? Why isn't it '23? And I guess to that point, I mean what should we, as outsiders, as investors, be looking for in terms of milestones to say they're on their way? I mean, do we have to wait until 2022 and say, "They did it or they didn't?" Or are we going to have some visibility saying, "Oh, wow they're making progressions towards the way that they need to kind of be there when they get there."

Yes. No, I understand. And I think there -- it's obviously a progression. None of this is a flip-a-switch type of thing. And if you look back a year or even 2, we wouldn't have even had use cases with large companies on the table, and now we have those. And you'll see us continuing to deploy more network. Again, 10 of our MEC locations will be out this year. We'll have more announcements with customers. I'm sure of that. And we'll be showing proof points along the way to our investor community as we always do, and I'm not surprised. I think there will be some -- the money won't, again, automatically turn on in 2022. We'll start to see it in 2021. But a company the size of Verizon, it's hard to get meaningful revenue. But when you look -- really look out to the future, this is a piece that is growing and uses next-gen tech, and customers are interested in it, and it solves some pain points. So I don't see how you can't be bullish about those things.

No. I want to talk a little bit more about the C-RAN edge. So we talked about the MEC edge and we've talked about putting the MECs in, I think, you said 10 of the, call it, 50-or-so SAPs this year. And my guess is that the private MECs will essentially be more on-premise, wherever that opportunity settles, for example, at the Walmart at the Corning. When do we see your thousands of C-RAN hubs as locations for edge and storage for compute, et cetera? I mean, is that -- will we go there? Does it make sense to go there? And kind of talk about that a little bit.

Yes. It probably does. It's a matter of timing and a use case. And if you think of it as mostly a latency profile, so you're going to get a certain 5G latency profile with a network deployed -- with MEC deployed at our SAP locations. Again, that's the plan. We'll get to all 50 plus of them. We're doing 10 this year and then we'll just keep on going. So that's the plan, and then you really will have a ubiquitous network for the most part. Then you have private, as you've said, which is more of an on-prem, more custom solution. But again, I think the way that we're starting to see these use cases, it will be custom. But from our perspective, we'll be able to scale the deployments because we'll see some commonality. So that's kind of exciting. And then the C-RAN hubs are in the middle. And there's no reason we can't deploy this type of equipment at a C-RAN hub. The question will be what is the use case that isn't solved by either an on-prem or something at our SAP locations. And there may be some. And one that we think is that probably an early contender is stadiums and venues. So there, you have a unique set of demand that we're all familiar with. And that demand, by the way, over time, isn't just people with the smartphone watching a game trying to upload videos or a halftime show, it becomes much more immersive, interactive game-watching experience with multi-view cameras and instant replays on your handsets, et cetera, augmented reality. And we showed a bunch of this at the Super Bowl last year. So you could just think of what that becomes not just for football, but for other leagues as well, so -- and even concerts. So think about these venues as a place to need it. And maybe there's not a place it's not really a private MEC because it's not going to go right on site, but we've got a C-RAN hub. There, not too far, think about maybe within 10 miles or so, that's a great location to put equipment because it meets that unique use case. So there will be some, but it will be use case driven.

I have a question that came in. It's got the word RAN in it. So it seems appropriate to ask it here. But what are thoughts around O-RAN? Will it have a place in the Verizon network and at what cost or performance benefit, if any?

Yes. I mean, for a long time, we've been advocating that we want best-in-breed in every element of the network, and we've been on a journey that takes fully integrated solutions from some of our suppliers all the way from the antenna to the baseband to the core elements, to the IMS, et cetera. And we've been decomposing that slowly but surely. And I do think that we've made good progress on that front. And the goal is always to have the equipment that is best performing at the best cost and meets the customers' needs. So we're putting technology first. It's got to work because our brand depends on it. So yes, I would just more generically say we continue to move towards that model. We've made good progress, and we'll keep pushing.

Okay. I want to shift gears and talk about 5G enterprise vertical opportunities. So a year ago at our conference when we were in person, you mentioned top verticals include retail, manufacturing, health care, automotive and real-time enterprise in terms of 5G enterprise places where you see opportunity. Which are coming on faster and slower? Would you add some? Would you take some off? Just kind of a year later, what are you thinking?

Yes. I think COVID did -- it made me think about a few things a little bit differently, sort of accelerated some use cases in certain areas. There's been a lot of people that are writing about health care and telemedicine. And sometimes -- and this isn't a slight at any particular body, but sometimes the tech is at a state, but the rest of the ecosystem is not quite ready to move it forward at scale. And I think you do see some of that in health care. I mean, there's obviously privacy concerns, a lot of insurance concerns, all sorts of things. But I think what we see now with everyone having these stay-at-home orders, the doctors and the companies that are involved in the health care system are much more willing to jump on the bandwagon and entertain some of these solutions. Now it's our responsibility to provide them reliably, to provide them at scale and to make sure that they're secure and privacy is protected. But I do think health care is an area that is -- it has to. It has to transform. And I think the tech is ready for it to transform, and now may be the time. So that's one. The other thing I would say is just XR kind of, generally, like consumers want these immersive digital experience. So high-definition communications with friends, family, colleagues, we're seeing it ourselves, even like remote sensors with other sensors, so things with things. We talked a little bit about gaming. So I continue to be bullish on gaming, entertainment, the sports. We're going to see -- we've been bullish on sports, obviously, from an application perspective and what we've shown with our partnerships with some of the leagues, the teams, the stadiums and venues. And this fall, I think you'll be surprised that we're going to come out with some exciting ways, I believe, for fans to interact and stay connected with their teams and their favorite leagues. So more to come there. But I think there's appetite for innovation in those areas in particular.

You've mentioned COVID-19, and this wasn't one of the questions I had prepared, but that makes me think of it. We'll see if Brady lets you back on next year. But do you think that COVID-19 delays the rollout of 5G? And I'm going to say, yes, and you could tell me why you might disagree. But my thought is that 5G, well, has these really cool use cases, some of which you just described. They're not yet proven. There's no real business model around it. We don't know exactly what it's going to look like. It's going to take investment. And I'm just wondering in a COVID-19 recessionary-type world, people say, "You know what? It sounds cool, but it's just too -- we're just -- the bridge is too far. And we're just going to kind of stick with what we have right now, keep our head down." And as a result, things -- mentality like that, the build out of 5G and bringing to fruition some of these things in that 2022 deadline, things like that might be actually get a little bit harder.

Well, I don't know. I mean, when I look at history, I think companies are made or broken in times of transition, and this is nothing, if not a time of transition. Leaning into new technology is, frankly, a proven way out of some of these situations. You've got workers at home in massive numbers. You've got -- and listen, to get to the heart of what's going on, you've got over half the population in the United States living paycheck to paycheck. So there are people suffering out there. And listen, tech can't fix everything, obviously, but there are new ways to restart and jump-start productivity and provide jobs. I think if we just think of relying on the old way that it was and let's sit tight for a little while, I mean, this just doesn't feel to me like that's a real winning strategy. I think Hans has been very clear about this for Verizon, and that is we're investing. Our core strategy doesn't change. We are critical infrastructure. We're going to build that infrastructure. We're going to build it well, as we always have, and we're going to work with our partners, whether they're customers or other companies in the ecosystem, to continue advancing that technology because that is the path forward. So I think you'll see winners and losers, to be honest, in terms of companies at the end of this, but the winners, hopefully, will be the ones that are looking at the problems in society and saying, "Hey, here's a way we can help fix this problem in society, using some tech that we've got right here, right here on the shelf." So I'm bullish about that.

And that's a great answer, and thank you. And I guess one of those technologies tied to 5G is network slicing. What, at this point, would you argue some of the more near-term use cases for things like network slicing? And I guess, will we see this capability soon? Do we need really 16? Just talk a little bit about, again, a year later, how we're thinking about network slicing. It seems like that's really the key technology to unlock a revenue opportunity, quite frankly, for companies like Verizon.

Right. So network slicing gives us the ability to carve up the network for individual and business needs, frankly, in a way that we can really not do with previous generation networks. So we had some crude tools that we employ as elegantly as we can. Whether it's a speed tier or time-of-day restrictions, we've got all manner of those. But to really say, "Hey, you're a mobile gamer and you want a service that can provide you with a latency and throughput characteristic that works for you, and you want it at these times on these days on the radio access network that is shared by everybody else," that's hard to do, but that can be done in 5G. That's one example. The work that we're doing with Corning, however, I think the slicing will have particular impact in businesses. So if you look at the MEC platform, for example, that we're deploying with Corning to do like this factory of the future, if you think about autonomous forklifts, which they're actually -- we're working on with them, IoT sensor data, retrieval and enablement of robots, everything that they've got going on in the factory, IoT, not a lot of bandwidth. Maybe you need latency and maybe you don't, it sort of depends on the application. Forklifts have a different characteristics that they need to rely on. So that's a great application for network slicing. So you've got one network, one factory floor, plethora of things going on in that floor, but you're allowing each one to take advantage of the network in different ways.

What do you thinking is different between how you have answered this question last year versus now? I mean, what have been the learnings around stuff like that? Is that -- is it really just those use cases you're kind of through the labs and everything else that you're doing, starting to talk to more and more people where you could start to see more tangible use cases, and that's kind of where we're at? I mean, is that the big shift?

Yes. I mean, I think it is a continuum. When we first think about MEC, it was sort of a "Hey, this is possible. You can put this stuff in different places in the network and get different profiles, what would you do with that?" It's all this iteration back and forth. I think now what's different is we can see these real use cases. And also, the customer base is more educated. We're more educated because we've been playing with the technology. The customers are more educated because it's -- this is a full ecosystem. I mean, listen, we're first, we're best, but it's a full ecosystem out there. So in the past, you might have -- let's go back 4, 5 years. You might have only heard Verizon talk a little more about 5G than some of the competitors. Well, guess what? Now they're all talking about 5G. So in a way that does help the broader consumer base, the broader business base to sort of understand what's happening in this area of technology. So we have never -- and if you had Hans on or Tami Erwin who runs our Verizon business group here, I know she would tell you this, that we have never had more businesses knocking on our door to say, "Hey, what can we do with you? What's next with this technology?" So I think the big thing where we're at right now is working those use cases with forward-thinking companies that are ready to solve their problems with this type of technology.

Awesome. With that, Nicki, we are out of time. Thank you so much for being here with us. I do hope to see you again in person soon.

Yes.

In the meantime, be safe, be healthy, and thank you so much.

You too, Colby. Thank you very much.

Okay, take care.