17 Conference Report #techonomy17

Verizon CEO Lowell McAdam on 5G & Digital Inclusion

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  • Techonomy's David Kirkpatrick and Verizon CEO Lowell McAdam in conversation during their one-on-one interview at Techonomy 2017. Photo Credit: Paul Sakuma Photography

Speaker

Lowell McAdam
CEO, Verizon

Interviewer

David Kirkpatrick
Founder and CEO, Techonomy


A conversation with Lowell McAdam from Verizon and David Kirkpatrick. An excerpt of the interview can be found below and the full transcript can be downloaded here.

David Kirkpatrick: Lowell McAdam is CEO of Verizon, which he has been doing for about six years. He’s been at the company’s constituent entities for decades. Exactly how to quantify it, given the way everything’s been rolled up over the years, is hard to say, but he’s doing a lot at Verizon. You’re going to hear quite a bit about the technology approach that he’s taking at the moment.

Quite notably, he has acquired a number of content assets now aggregated under Oath. The most well-known recent one of course is Yahoo, AOL, TechCrunch, and other elements that have been combined into this Oath business, which is an interesting participant in the digital ecosystem at a time when, as he and I were discussing backstage, Facebook and Google are really getting raked over the coals, just now on the stage, in the next session after this.

[LAUGHTER]

Really, it is quite striking. We’ve made it part of our theme this year to look at what the relationship is between society and the net giants. Even I’m sort of surprised about the sudden shift in sentiment that we’re seeing and I think it’s being displayed here time and time again—in several of the breakouts I’ve heard it also.

Anyway, Lowell is well positioned because of that, in fact. I mean, what’s interesting, and I was saying this to him also Verizon is a tech giant, but it doesn’t get painted with that brush. You know, so you’re kind of lucky that way, right?

McAdam: Well, it’s kind of good and bad, David. The thing that always amazes me, when we meet with a large customer and we talk about all the different services that we offer, everything from 150 countries around the world, our footprint on broadband and what we’re doing around 5G, which we’ll talk about shortly, they all go, “Boy, I had no idea Verizon did that.” In some ways, that’s sort of good to go below the radar in some cases, but obviously we want people to know what our capabilities are.

Kirkpatrick: Well, you know, I know one of the things that is sort of core to the thinking you have about your company right now is extending your platform more broadly in the United States. Talk about that and how you’re going to do that.

McAdam: Well, there are two ways to this. We are known—the core of our company is to be the best, most reliable network. And so our fifth-generation technology, we call it 5G, will dramatically change the way people use wireless devices going forward.

I’ve been in this industry for almost 30 years. I don’t think I’ve ever seen anything that will change peoples’ lives like this new technology. So big investments going there.

But then as you mentioned, we got a little tired of, in our past lives, we would put all the capital on the ground and provide the highways that these smartphones and everything operated over but the Googles and the Facebooks made all the money off of it. Eric Schmidt said to me once, “If you make one penny over your cost of capital, I’m a pretty happy guy.” So I don’t want to be that—I don’t want to do that for them anymore. So that’s why we’re investing in things like Oath and bringing these different, whether it be millennial media, or as you mentioned Yahoo and AOL, we think that we can provide a great core connectivity service and then offer a few of these things on top of it that customers want. They’re looking for an alternative to Google and Facebook, as you said, and we think we can provide it.

Kirkpatrick: You’ve also got five million people with Fios. How many wireless customers do you have?

McAdam: Almost 120 now.

Kirkpatrick: 120 million wireless customers, that is quite a few. So you really are kind of indispensable to the infrastructure of the United States. Interestingly, also, you’re highly regulated.

McAdam: Yes, parts of us.

Kirkpatrick: We’ve been talking about how unregulated those other people are.

McAdam: People don’t know this, David, but just one of these “I didn’t know Verizon did that.” Literally 60 percent of the world’s internet traffic touches our network every day.

Kirkpatrick: Now, is that partly outside the United States? How much?

McAdam: Yes. It’s being in that 120 countries and we have huge undersea cables and we’re into Asia and Europe, so that’s the number.

Kirkpatrick: But outside the U.S., you’re more of a B-to-B player, right? You’re not really a branded company except through Oath potentially.

McAdam: Yes. In the past, it’s been an enterprise solution. But now Yahoo and AOL have significant presences throughout Asia and Europe.

Kirkpatrick: But aside from that, what are some of the businesses you have in those regions?

McAdam: Outside the U.S.?

Kirkpatrick: Yes.

McAdam: That’s really about it. Now, we’re just going in, in telematics. We’ve bought a couple of fleet businesses, Hughes Telematics, and built on that. And so we do actually provide services in China, for example, for Mercedes Benz. We have many of the car companies in Europe and we’re getting into more supply chain management by taking that vehicle platform and extending it out into the warehouse and to the delivery.

Kirkpatrick: Okay, well, there’s plenty we could talk about globally, but I think there’s so much interesting stuff happening here at home. Talk more about 5G, because I think that’s something that, even in this audience, not that many people understand. We’re fortunate we’ve had some good work with Ericsson over the years and Ericsson has explained to me a lot about it and every time they do, I go, “Wow, I didn’t know that.” Explain why you’re so excited about this next generation technology and how soon it’s going to be here.

McAdam: Well, let me give you a couple of factoids about this. A typical wireless network today delivers about 200 milliseconds of delay. So you hear a lot about autonomous cars and virtual reality, augmented reality. They need around 50 to 90 milliseconds of delay. 5G will deliver less than one millisecond of delay. So when I talk to the pure hardcore tech developer people, their eyes just bug out. I was with the Bose folks a few days ago and their eyes just lit up when all the things they could do around virtual reality with a millisecond—the gaming company companies do. So that’s one swim lane.

The battery life on a 5G enabled device for the Internet of Things, can have a 10-year battery life. So you think about what you could do—we literally are working with companies that want to embed chips into the striping that goes into a parking lot or down the road because you’ll always be able to see what the traffic flows are, whether traffic is available—

Kirkpatrick: And you only have to change the battery once every decade?

McAdam: Once every ten years for that sort of an application. Most phones today get about 10 megabits of throughput. This will deliver a gigabit, so a hundred times more speed on your device. We’ll also be able to connect a hundred times more devices to the network because of the way it’s architected. So our capacity goes up literally by a factor of 1,000 in our network.

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