VZ
#Thanks, <UNK>.
So on the handset piece for upgrades, what I would say is we are anticipating a little less volume than last year because of the total iconic launch of the iPhone 6 and 6 Plus.
But this quarter, we are still anticipating a fairly heavy volume quarter as every fourth quarter is, but I would anticipate a little less than what we saw last year.
So I would think that upgrades would be a little less than what we ran last year.
As far as what we see from a take rate on installments going into 2016, look, at this point, we are guiding to 70% in the fourth quarter.
We are now 100% at the point-of-sale with Edge only.
Of course, we have an exemption for current customers who are on the subsidy model who can opt to take a new subsidized handset.
So we will have to see how that works going into 2016 and that may keep us around that 70% to 75% take rate.
But it's too early to tell, so I don't really want to give guidance yet on what the take rate will be.
Let's see how we come out the fourth quarter.
I will readjust that in the first quarter.
Thanks, <UNK>.
So on EIP, look, we've gone to the full Edge product.
As I've said before, I'm not interested in a rental program.
We are not seeing any impact from those programs from the competitors in our base and I think our results speak to that this quarter.
I think they will speak to that in the fourth quarter as well.
I think what you will see is, if you speak to the rating agencies, they are becoming very concerned with the balance sheet risk of some of the industry on putting up rental phones on the balance sheet with what the residual value will be with those rental phones.
So again, as I've said before, that is not something that we are entertaining at this point.
Again, I never say never, but that is not something that I would have an appetite for.
On the prepaid decline, I think, look, generally, if you look at how postpaid and the price points of postpaid and I've talked about this before, postpaid pricing is more or less mirroring what prepaid pricing was in the past and we are seeing some migration of our prepaid product customers to postpaid, but it's more probably limited than some others because of our intense credit models.
You have to pass the credit in order to become postpaid.
But there is a segment of prepaid customers that are good credit customers that now that the price point is closer to affordability for them on postpaid, they are moving into the postpaid product.
I don't really look into the prepaid product decline as a problem set for us at this point.
We generally really compete with prepaid in our reseller model with companies like TracFone and Straight Talk and Straight Wireless and that's where we really drive home the lower-end product without our brand connected to it.
Although we don't disclose much in reseller anymore, that segment continues to perform well for us.
Look, if you look at some of the programs, you have balloon payments that are due in 18 months.
18 months from now, the market is changing.
There's a lot of Apple product hitting the Chinese market now where China was one of the larger areas where we sold off used handsets.
So as these markets get heavily penetrated with newer product, that could impact the residual value of these phones going forward.
So it's just a risk that is going to have to be handled by the industry under that program.
And at this point, that's not something we want to deal with.
Thanks, <UNK>.
Okay, so on mobile data, what we're seeing right now is a trend across our entire network of 75% growth year-over-year.
Obviously, some of the metropolitan areas like a New York and Chicago are higher than that.
Chicago, we said, is up 75%, but New York, San <UNK>cisco, some others are higher than that in growth rates.
So it depends where you are at and then we have markets obviously lower than that because of more rural areas.
So that's generally what we are seeing in the network right now.
On the installment sale billings of 1.2%, yes, I do believe that will go lower as we make this transition into 50% of our base for installment sale.
So the trend of service revenue and the installment billings plus the service is going to continue to decline until we get into that middle part, latter part of 2016, where the curve will reverse, and then you'll start to that flatten out and start trending back up just like the math would dictate.
No, I think what you're seeing now, if you look at the previous quarters, it's pretty well trending about the same.
I don't think it's going to accelerate.
I guess, first of all, let's set the stage that the wireless industry has always been very competitive and even through all this competitiveness, the industry themselves continues to grow.
Even though everyone thinks that the industry is slowing, we continue to have net adds overall.
Tablet has become a bigger piece.
Data continues to grow.
So the industry overall, although very competitive, continues to grow despite all that.
Our focus has always been competing on network quality, reliability and simplicity.
That is how we have been winning for the past 18 years and that's our focus going forward.
You can see that with our new brand campaign, Better Matters, because what we believe with our brand and our campaign is we're trying to send the message that although some say video and data are not as important and people are willing to get disrupted, I think if you talked to millennials, the thing that frustrates them the most is the spinning wheel when they want to watch a video or download something.
So our focus on our brand is better does matter.
We have the best network.
We are the most reliable and we have become a more simple company to deal with with our simplicity of pricing.
So that's where we look to compete.
I think the fourth quarter will be a competitive quarter, as it always is every year.
I think you're going to see promotions in the marketplace and this industry is going to compete as we always have.
But I think our differentiation is how we differentiated ourselves through this whole entire process of installment sale and now rental.
As I said before, the rental programs don't seem to be having any impact or appeasing to our customers.
So I would say that we will continue to do the same.
As far as how the industry changes, I think what you are seeing from us is we are going in a different direction with our go90 launch.
We're appealing to a millennial population with our network and our products.
And I do think that, as we've said before, you can only price down so much and then you need to generate cash.
I think, as you said, some have to start generating cash in order to invest in their networks to support the growth of the data or else things are going to start to fall apart and I think you are starting to see some of that in some of the national RootMetrics drive tests on where some of the networks are starting to feel pressure and starting fall down in the rankings.
We continue to invest heavily in our networks, as I said before.
You should continue to see us as a flat overall capital company, but Wireless continues to trend up.
That is important for the product set we are launching.
So I do think there will be more focus on returns and profitability and that is good for the industry.
Well, I think that you stated it, <UNK>.
We have an existing MVNO agreement and we were informed that they are going to execute on that agreement.
The agreement is the agreement.
I am not going to get into whether we are discussing revising the agreement or the terms and conditions of that since it's under NDA and we will see how this plays out.
Obviously, the industry is moving.
Cable is going to do what they are going to do and we're going to do what we're going to do.
I think that, again, though what I would say is we truly believe that Wi-Fi is a complementary wireless network, if you will, with LTE and we don't believe one replaces the other.
Just like when we launched LTE we said, look, it's not going to replace Wi-Fi, it's not going to replace broadband into the home.
Similar, Wi-Fi is not going to replace LTE.
So I think that's where it stands right now, so I really won't interject anymore around the MVNO.
We're right on course.
We're actually testing in the labs now and we are looking to deploy sometime in 2016 and again, the unlicensed LTE is a great piece for us to increase our capacity and again, another differentiator between LTE and Wi-Fi is LTE is a fully managed network; Wi-Fi is not.
When you start to load up Wi-Fi, that's why you start to see real degradation in service, whereas with LTE and then overlaying unlicensed LTE, we can dynamically increase capacity when we see that capacity needing increased.
So it's going to be a very viable tool for us in order to increase capacity without deploying a lot of dollars.
Thanks, <UNK>.
I appreciate it.
On the auction and the spectrum bands, it's a good question because the current auction is a 600 megahertz band and as you know, we deployed LTE contiguously on 700 megahertz.
That doesn't mean that we can't operate with 600 megahertz, but 600 and 700 don't play well together.
There's a lot of interference.
So where we have 700, there would be a lot of work to deploy a 600 megahertz spectrum.
But there's areas where we could use lower band spectrum, but it's probably not the top priority.
We like the higher band like AWS.
We've said that all along that Charlie is sitting on very good spectrum.
It's very good for capacity, which is why we spent $10.4 billion in the auction.
But we also can do things like we've done in Chicago and New York, where we felt the license cost was way too high and we instead decided to deploy small cells and get capacity in a more reasonable, cheaper way, if you will.
Now some of this spectrum will come back to market.
We don't know how the FCC will treat that yet, so we will just wait and see, but higher frequency spectrum is capacity and that's really what we need at this point in time.
As far as the Wireline commitment, look, I think with the three divestitures in the South, they were more or less footprints which were not contiguous to anything else.
Most of that property was copper, not fiber.
So when we look at the East Coast, it's a much different footprint.
We will have covered over 70% of the footprint with our fios product.
This is a ---+ we are very committed to it.
We are investing over $4 billion into the Wireline company a year, so that shows our commitment from a capital investment perspective.
We have already passed 20 million homes when we committed to originally 18 million, so we are very committed to the fios product.
It goes hand-in-hand with our Wireless strategy and I think if you've asked anybody like an Altice if you were going to come in and compete for fiber into the home, you certainly would either pick the East Coast or the West Coast and they've started with Cablevision in the East Coast.
So we have a very viable footprint and we are committed to that.
Now, again, as I have always said, you never say never.
And of course, Lowell and I are always open to new options and we always keep our eyes open for that.
But, at this point, we are very committed to the Wireline business.
We have time for one more question if you can please tee that up.
All right, great.
On the enterprise piece, I guess what I would say is we are seeing more or less the same.
There has really been no change.
I think there's a lot of competition.
There's a lot of price compression continuing in the IP space.
As we've said before, the strategic side around security and data centers, but even within the data center space now, there's an awful lot of competition happening with price compression.
So I think what you are seeing is a trend that we think will continue as we revamp the portfolio, if you will, and come into more of where we are going to be willing to compete.
So I think you're just going to see more of the same here.
As far as the Wireless network and deployment of AWS, we are looking at probably in the 2017-2018 timeframe with that similar to where LTE would be for starting in 2016 and then, of course ---+ so that will continue to deploy out there.
Then on the phone only where we would only get an LTE-only handset, probably more to the end of 2016 is where we are looking to deploy an LTE-only handset.
That takes us to the end of the questions.
I'd like to turn the call back onto <UNK> to close.
Thanks, <UNK>.
I'd just like to close with a few key points.
So through the first nine months, we have solidly executed on our fundamentals, delivering quality customer growth and strong financial results while positioning the business for the future and returning value to shareholders.
This execution has generated strong cash flows, enabling us to consistently invest in our networks, platforms, future growth and innovation.
In addition, we have returned value to shareholders and maintained a strong balance sheet, keeping us on track with our deleveraging plans.
As I highlighted earlier, we have returned more than $11 billion to date through dividends and a $5 billion accelerated share repurchase program.
In September, our Board of Directors again reiterated their confidence with a 2.7% dividend increase, making this the ninth consecutive year of a dividend increase.
We look forward to maintaining our positive momentum in the fourth quarter as we execute our strategy, launch new products and services like go90, positioning ourselves for future growth and creating value for customers and shareholders.
Thank you again for joining Verizon today.
