He c. E. O. Of verizon, Hans Vestberg as we proceed throughout the hour. Francine european economies are starting to claw their way out of recession and we had encouraging p. P. I. Physician and the confident p. M. I. Jumped to 54. 8 with the services and manufacturing sectors expanding. Joining us now from paris is william, the Bnp Paribas Group chief economist. It feels like this was a good week for europe. We have the p. M. I. More than expected and the Recovery Fund. If you look at job losses theyre going to get ugly in europe. William that is a concern i have if you look at the p. M. I. Data today. What strike is that yes, manufacturing significantly and new export levels in germany are just flying but the employment series is showing that companies are under no intention whatsoever to increase hiring and on the contrary. Thats a concern. Its a concern because the recovery will depend on what households do, how much they spend and they need confidence. Alix what is going to give them that confidence . William the problem that you have at the current juncture is you have the kind of circular reasoning, what i mean is that households need to be comfortable about the labor market prospects. Now, companies can only give that comfort if they say their sales will be ok. One needs the other and that of course is why it is so important that we have seen this Recovery Fund agreement in the European Union this week because what that brings is the prospect in addition to the National Policy impulse that will come later on this year, it will bring the deployment of a significant amount of money, more than 5 of European Union g. D. P. Over the coming three years and imploded for 2021 and 2022. That i think will play a role in bringing some confidence. Francine i guess the concern is that the european economy, people can be confident about it but it doesnt live on its own. Its in between asia and the u. S. The u. S. , were seeing whats happening with the economy and theyre seriously concerned about trade escalations between the u. S. And china. How will that impact the european economy . William thats a very fair point youre making. Theres not a shortage of topics to be concerned about. You can add to your list as well whats going to happen to brexit, green or not. The latest indications show that its going to be very difficult to strike a deal, and im referring what has been said in that respect. For instance when you look at the chinese data that came out very recently, what you observe is that production is going ok and infrastructure but on the other hand, households he very cautious. You see that in a very global, interconnected Business Environment what is happening to the trading partners is also playing a very Important Role and then of course there is the big unknown out there which is how is the pandemic going to evolve . Weve seen the situation in the u. S. But also in a number of European Countries, you do see that there was some increase in the number of new cases which is then raising fears that social distancing and the likes drag on inue to be a the recovery of the economy and growth. Alix we set it up well to the risk of the p. M. I. s are on the downside. Im just wondering, it feels like the market is looking at the europe euro as a safe haven. Is that true, do you see that, and is that legit . A liam what we have seen is change on the mantle which i would expect and the europeans hope to be longer lasting is that now they really have their act together. If you look at the creation of the euro, all the effort has come from the European Central bank, whatever, and the Pandemic Emergency Program which now has been created with this debt issuance at the e. U. Level is a precedent, to address future nature economic shocks. And i think in the longer run this should be a factor that is giving people within the European Union but also the nonEuropean Union and investors greater confidence and also what is reflected in recent dynamics of european Financial Markets and including the Exchange Rate francine william, whats your biggest concern for the World Economy overall, where does it come from . William well, twofold. One concern is of course what is happening in terms of the Health Situation because we can only observe and hope all the measures taken will be efficiently effected. And the other concern is purely economic, is that we are still underestimating the kind of scarring effect that you have from such a deep recession. The most increase in corporate indebtedness, what does it do to companies in terms of decisions i think they will refrain from investment, from paying back debt. The other concern is too Many Companies are still very close to their operational break even and if they continue to be in that situation for several months, i think what they will do is want to lower that break even point by cutting fixed costs and by shedding labor and thats a big concern i still have. Alix how does it vary per country now particularly when you factor in the euro Recovery Fund, italy obviously will be a big recipient and we dont get the pers and p. M. I. And france and germany doing it better. Its hard to make a argument in the resurgence without in European Assets without them . William thats a very fair point. I think at the same time you have the complexity when you look at the health data, for instance in italy they are very good, very ok. So it shows you the complexity that they are suffering so much and now its all under control, although in other European Countries things are worsening again. I think all in all what is really important is what the orientation of the business of european listed companies and i think that is perhaps an argument to say well, they obviously have vacation in terms of products but also in terms of markets is something thats important in the current environment and that would then go for perhaps a draft for the Larger Companies at the detriment of small cap stocks that will tend to be geographically more concentrated but also financially than perhaps lets say a less resilient situation than you would have with larger caps. So this is something in the coming months ill be very keanly following to see whether that feeling i have would be confirmed. Alix its not over basically is what were getting for it, its not all green. Thanks very much, William Devijlder of b. N. P. Paribas. And topping the assets, well look at things with hans vest berg. This is bloomberg. Alix live from new york im alix steele with Francine Lacqua. These are the european flows in the markets. The Second Quarterly result, the pandemic decreased earnings by 4 despite sales topping estimates and the company keeping the earnings forecast. Joining us now is Hans Vestberg. Always good to talk to you. One of the take away from analyst is no big surprises which in the middle of covid feels like a very big victory. Wonder if you can give us some insight in Retail Operations in states reclosing or having a surge in covid outbreaks, how are you thinking about that the back half of the year . Hans great to be on. Thanks, alix. If we start with how it looks, we see the pandemic moving around in the United States, we have today 77 of our stores open and are actually going to have 100 open by end of this month. But of course but it talks about a different operation, the innovation in our Retail Stores has been great and we do curbside delivery and cashless delivery and we also have a requirement on masks of any customer coming in. You also need to book a time in many of the Stores Coming in. Of course we have changed our mod up but if you look at the numbers, especially at the end of the quarter, we are still generating a lot of new customers and ultimately we have 72,000 new net phone additions in the quarter and a record low turn. The infrastructure thats so important, the ability to broadband is so essential to stay connected to friends and family and do business we see this continue. Were very resilient in this time period when customers are suffering and in a time unheard of. So of course a lot of customers suffering but we work with them as well. Francine hans, how worried are you that a lot of people will not be able to make their bills . And is this your biggest concern for verizon Going Forward . Hans what weve seen is we of course saw in the beginning of the pandemic many asking for the pledge to keep america connecteded, we are not disconnecting them. And in the quarter we saw an improvement on that and today i would say our delinquent receiveables are as equally large now as before the pandemic and the ones that have asked for a pledge to keep america connected, 80 of them are actually paying some part of the bill. Our work is to see these loyal customers continue to be our customers. And we have a great opportunity to work with them with refinancing, etc. Its such a crucial time and disconnecting our customers is the wrong way. We work with them and want them to stay with us. Alix that leaves you exposed by 300,000 customers that havent paid and you said youre working with them on plans but do you see that as a more material risk and is there a time frame youre looking at or a number that it gets to that has you worried . Hans first of all, i dont recognize that number. I said, we have more than 100 Million Consumers using our Network Every day. There is of course some of them that have a tougher time. This is nothing unnormal for us that we have a few key customers that cant really pays us. Were working with them. Theres no time frame in the works, etc. I feel we have a Great Network, very loyal base that wants to stay with us and we work with them. I assume that they all will be our customers a year from now. Francine but hans, the pandemic is different, we are looking at the numbers, 1. 5 million customers that were protected by the pledge not to be disconnected due to nonpayment and you say that 80 of them made a payment. Hans yeah. Francine so the numbers are bigger than anything you ever had to deal with. Hans no, they are not. Thats what im saying. The delinquent receiveables are equal now prior to the pandemic on the base we have a fairly small number. Again, our job is to work with our customers so they can continue to be a customer of verizon. Yes, of course, its tough times and the pandemic and economic downturn and unemployment is extremely high but we dont feel this is Something Different than what weve seen before and why we work with our customers. Theres no triggering event for us. Alix what about for Small Businesses and your Subscriber Base in that arena . Hans Small Business is different and of course will have a larger impact and are a little bit higher on keep america connected and asking for refinancing. And then some of them are of course shutting down their businesses. We see them a little bit more. But on the other hand we saw the large practice actually acquiring or buying more right now and we see our governmental business growing much stronger. Its a mix and how the society is turning out in these times, unfortunately. Francine how much pressure do you feel to cut prices given that people are struggling with their bills in general . Hans i think we have everything from prepaid all the way to unlimited premiums. So we actually have a way for our customers to pick and choose. What is unique for verizons proposition is we are mix and match. So in a family you can have different plans in the family. That has turned out to be really well for us and we wrote a lot of new business last year until the pandemic happened and were also writing now at the end of this quarter. I think we have an offering that customers depend on their financial situation. Thats been all the time our plan to see that we can address the cool markets given different opportunities. Alix when do you feel the tmobile crunch, though . Because they added three times as many customers in the Second Quarter, their plan that is comparable to what you have is 100 and their is 140. At what point do you have to bite the bullet . Hans im not sure what you mean by that. I think we have been competing in this market for the last 20 years and will continue to do so. Think we have a Great Network that nobody else has. Thats our work. We have exciting times ahead of us with unique and transformtive society that we are developing. As i said, we have our mix and match at the same time that is appealing to our customers. Were not afraid of competition. Weve had it for all time and nothing new. Were just going to compete and were a leader and of course everyone beats us and were not going to let them beat us. Francine hans, what would the Biden Administration actually mean for spectrum but also Rural Broadband policy . What would that mean for verizon . Hans im not sure really to say, but the only thing kid say is that americans will decide who will run this country. We as a corporation, we will work with that administration and follow the policies and laws that they will come up with. Nothing different from Previous Administration or whatever changes are coming. I think were operating in 150 countries and thats how we operate and we are a global citizen. We need to follow the laws and rules. If the world says whatever changes there will be and if there will be changes well comply. Alix 5g, when does it happen . Hans its already happened but i guess youre asking from the consumer point of view, i think we have a huge execution in the second half. Well have them put out the wide band which is the Fastest Network in the world. And have another offering nationwide 5g. So this second half will be very exciting. We have plenty devices on 5g already in the market so we are ready for anything that will come up. And i think that our customers will enjoy enormously new way of using wireless technology. And i think, as i said before, coming off a 5g phone will be important and we dont know when and how but the i. O. S. Penetration in the u. S. And as well on our Consumer Base we have at verizon. Its important because people are hardly moving between the two operating systems that you have in the mobile phone market at the moment and why its important whenever they decide to come up with a 5g phone from apple. Alix its totally celtish to be asking this, if i upgrade my apple phone can i get it on verizon in 5g . Hans you have to ask apple. Alix from your per spictive you will deliver or if i have to get a google foifing . Hans no, the network will handle it but apple hasnt launched a 5g phone capable of handling signals in the 5g network or the wide band and as well the nation of coverage on the lower bands. They havent come up with that phone yet. Thats what we need to see when theyre coming out. But we are excited. And i think the country is excited as well whenever they do. Francine hans, youre quite optimistic about the future and were going through a pretty tough time economically for frankly everyone in the u. S. What do you worry about the most . Is it that the situation gets worse or is it something that, you know, we cant quite perceive . Hans im optimistic because we have a business that is resilient even in tougher times. But its also working in growth times. What concerns me of course is that were managing multiple crisis here in the United States at the moment and of course the pandemic is continuing to spread and impacting people brutally with the fatality rates very high. Secondly, of course, that leads to economic downturn and we know that the disparity in our economy is getting greater and of course the vulnerable is getting more vulnerable. And our concern, we also have this Racial Injustice in the thauns is panning out. All three at the same time is unheard of. Ive been a c. E. O. For many, many years and i havent dealt with crisis ive never seen so many things at the same time and you need to understand we have customers, hundreds of thousands of them and all feel the same concerns. So of course thats distinct how you run business as usual and seeing you do it right at the same time and being a responsible business. That we do every day and we balance it and thats of course a concern for any Large Corporation or any organization at all. Alix hans, quickly, youve been so generous for giving us so much time. Theres been a lot of heating up between china and the u. S. When it comes to, say, consulates, etc. That doesnt directly affect your business but when you see these headlines getting more hostile between the two countries how do you think of that . Hans i think of course having countries not getting along, its not good. We should have a world where we fight the big challenges. But for verizon, theres no impact at all. We dont use chinese equipment. Were not in that market. So for us it doesnt really matter. But when its geopolitical theres a challenge when you have this type of situation but ultimately we want peace and we want friendship and we want to attack the larger soci