VZ

Defensive yield play in a 3-player US wireless oligopoly ($VZ / $T / $TMUS). 8M FWA subs, on track for 8-9M by 2028. 6B equity + debt assumption) closes the fiber gap vs $T but lifts net debt to ~$160B+.

Bull case:

- 6%+ dividend yield, 18 consecutive years of hikes; FCF ~$18-20B supports payout + deleveraging

- FWA + private 5G enterprise = optionality beyond mature mobile

- Frontier deal pulls fiber convergence forward, defends against $TMUS fiber expansion

- Postpaid churn back to industry-low ~0.9%; Verizon Value brand reduces flanker leakage to $TMUS prepaid

Bear case:

- Net debt/EBITDA ~2.7x, well above $T (~2.5x) and $TMUS (~2.5x); Frontier pushes leverage higher pre-synergy

- Cable MVNOs ($CMCSA Xfinity Mobile, $CHTR Spectrum Mobile) taking 60%+ of industry net adds; structural ARPU pressure

- Capex intensity 14-16% of revenue through 2027 for C-band + fiber buildout

- Rate-sensitive: bond-proxy multiple compresses when 10Y yields back up