It plans to cut CapEx by 23% in 2024, shift focus from 5G build-out to sales
Bloomberg reports Verizon Communications’ CEO, Hans Vestberg, saying he expects CapEx to fall by 23% in 2024 as it completes the main 5G network buildout and focuses on sales growth and cash generation.
He said spending in 2024 will be about $17 billion after the peak caused by 5G expenses, speaking at a Citigroup Inc. investor conference. This, Vestberg reckons, will mean that by 2024, Verizon will have “the lowest capital intensity in the industry, in the world,” relative to revenue.
During the 5G buildout, spending on networks by Verizon and its rivals accounted for a higher percentage of revenue than times of less intense investment: Verizon’s CapEx was about $22 billion last year it scrambled to catch up with T-Mobile US’ 5G roll-out.
More information will be available about the operator’s proposed 2023 spending when it reports year-end results later this month.
Catching up with subscribers?
Although it is the country’s largest operator, Verizon has lagged its competitors in growing its subscriber base in recent years. T-Mobile’s investment in its network and AT&T’s price promotions proved successful at attracting subscribers However, Vestberg said that in Q4, Verizon had a net gain of mobile subscribers.
Its top priorities for 2023 will be to generate more cash and increase average revenue per user, while lowering costs, according to the CEO said. One area particularly expected to contribute to that growth is sales of wireless home internet service, a growth area in the US that is impacting cable companies’ broadband business.
Verizon pulled the plug on its 3G network at the end of last year, behind both T-Mobile and AT&T which shut down their 3G infrastructures earlier in 2022.