Verizon Communications Inc. expects to cut capital spending by 23% in 2024 as the company completes its major 5G network buildout and turns its focus to sales growth and cash generation.
(Bloomberg) — Verizon Communications Inc. expects to cut capital spending by 23% in 2024 as the company completes its major 5G network buildout and turns its focus to sales growth and cash generation.
Spending in 2024 will be about $17 billion following the surge in 5G expenses, Chief Executive Officer Hans Vestberg said Wednesday at at Citigroup Inc. investor conference.
Capital spending was an estimated $22 billion last year as Verizon rushed to catch up with T-Mobile US Inc. The company will project 2023 spending later this month when it reports year-end results.
By 2024, Verizon is going to have “the lowest capital intensity in the industry, in the world,” relative to revenue, Vestberg said. During the 5G buildout, spending on network upgrades by Verizon and its peers rose to a higher percentage of revenue than periods when expansion wasn’t as heavy.
Subscriber growth at Verizon, the nation’s No. 1 wireless carrier, has trailed that of rivals in recent years, in part due to the network improvements at T-Mobile and price promotions at AT&T Inc. Verizon closed the fourth quarter with a net gain in wireless customers, Vestberg said.
The company’s top priorities this year are to generate more cash and increase average revenue per user, while lowering costs, the CEO said. One area of focus is sales of wireless home internet service, a growth area that has cut into cable companies’ broadband business.
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