Speaking at an investor conference Tuesday morning, Verizon executive Ronan Dunne said the telco would meet its goal of cutting $10 billion in costs, which was first announced four years ago by then CEO Lowell McAdam.
Since 2017, Verizon has trimmed its budget through a combination of virtualization, early retirement offers to its management team, and operational efficiencies through its One Fiber and Intelligent Edge Network initiatives.
"We will deliver on that and just move on to the next wave," said Verizon's Dunne, executive vice president and CEO of Verizon Consumer. "Whether we'll present it in the market in quite the same way as Lowell did originally four years ago, I don't know.
"But as regards (to) the focus of operational efficiency, it's a ruthless, consistent focus inside the business in exactly the same way as balance sheet strength has always been a watchword of Verizon. And so rest assured those will continue to be as important in '21 and '22 as they have been in the last few years."
Dunne said Verizon has been reaping billions of dollars every year in operational efficiencies from the core of how it builds network to the efficient way it carries traffic on that network with its One Fiber strategies. Verizon's One Fiber project, which has been underway for five years, combined all of the telco's fiber needs and planning into one project. It also allows Verizon to plot out its fiber uses cases and purchasing plans across all of its sectors.
In addition to densification of the wireless network, backhaul and fronthaul, and enabling wireline access, having fiber deep is key for supporting radio access networks (RAN) as well as provisioning an increasing number of small cells.
"The particular area that I'm focused on in my part of the business is really AI at scale," Dunne said. "That really allows us to improve our CRM efficiency. So the efficiency of every dollar invested in acquisition and retention. Also the efficiency of every dollar invested in those elements that are customer service elements, and distribution elements."
Verizon first announced its Intelligent Edge Network (IEN) four years ago as a means to move away from its TDM networking to a more simplified Ethernet-based network. That shift also gave Verizon a single management platform for its services and applications.
About a year and half ago, Verizon combined its wireless and wireline assets and services to better serve its residential and commercial customers with a network-as-a-service approach.
"I've always been a big believer that customers don't really buy technology, they buy what the technology enables," Dunne said when asked about the benefits of the new network architecture. "So the idea of us having two technology businesses, a wireline business and a wireless business, essentially sitting apart, certainly in consumer space made little or no sense.
"I was a strong advocate of this transition to a consumer business. It allows us to essentially, which is important, be bearer agnostic by bringing the best possible technology solution to the situation at hand. But also, it allows us to leverage our scale much more effectively."
Dunne said the way in which Verizon CTO Kyle Malady built the Intelligent Edge Network has allowed Verizon to lower its operational costs by benefiting "from efficiencies within the core and right through the business."
Previously, Dunne said Verizon would look to acquire content in one region, such as the Northeast.
"I was going out as a 6 million homes business acquiring content and ignoring the fact that I have 100 million consumers in the business overall," Dunne said. "Now I'm able to go out and bring the consumer business in its entirety to bear for partners like Disney, like Discovery and others."
In addition to supporting 4G LTE, 5G and fixed wireless offerings with One Fiber and IEN, Dunne said Verizon is taking the same approach across Verizon Business Group in order to partner with companies such as Microsoft and Amazon Web Services at the network edge. Dunne said Verizon Business Group CEO Tami Erwin is leveraging the same assets on the wholesale side of the company
"When you look at how Tami is going to market with AWS, with Microsoft, people like that, demonstrating exactly the same way we can leverage (the network) across the customer base for the advantage of both the customer, our partners, and ultimately, our shareholders, I think it's a genuine win-win," Dunne said. "And it has worked really, really well."