Verizon’s New Network Leader and the Growing AI Memory Crunch

Full Transcript

Don Kellogg 0m10s

Welcome to the two hundred and ninety ninth episode of The Week with Roger, the conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner. How are doing, Roger?

Roger Entner 0m22s

Good. 200 90 9.

Don Kellogg 0m25s

Yeah. There's a big number coming up here.

Roger Entner 0m27s

Yeah. And we'll have a really awesome guest. I'm really looking forward to that.

Don Kellogg 0m31s

It's gonna be terrific.

Roger Entner 0m32s

Well, this is a good episode next week weekend. Tune in, that's an awesome one. But let's talk about this week. What do we have?

Don Kellogg 0m40s

Yeah, so it looks like there's some leadership changes at Verizon. You wanna tell us about this?

Roger Entner 0m45s

Sure. Well, there have been changes across The Atlantic. So Abdul Moudesir was named earlier this year, basically the CTO of Germany for Deutsche Telekom, and he was there for eight years. After a few weeks, he abruptly resigned, and now he has resurfaced, you know, calling from Germany still. So it was very interesting to see that story develop.

Roger Entner 1m17s

And so up to now, we appeared at Verizon.

Don Kellogg 1m23s

Well, he's replacing Joe Russo.

Roger Entner 1m24s

Yeah, he's replacing Joe Russo, who is overall responsible for the entire network. And there were like pretty early on, about four weeks ago, rumors. When I was here in Germany the last time, I heard the first rumors that he would probably come to Verizon. And then a couple of weeks later, I had another conversation and it became pretty certain that he would show up here. You know, that's basically the new pipeline.

Roger Entner 1m52s

It's a much bigger country with much bigger salaries and much bigger playgrounds. And executives like Abdul, who has been highly regarded by Deutsche Telekom, and apparently Tim Hodges spent like an entire Saturday trying to convince him not to leave, and still he left because apparently, I know some details, but they don't matter. Things didn't plan out. I think Aptu will be a great choice for Verizon, brings new perspective and a deeper perspective and a global perspective to Verizon, but it's that conveyor belt that's coming from Europe because a lot of the American executives are conflicted. What's really interesting when you read the German press, the chairman of the board of Deutsche Telekom, Apple, said like that Deutsche Telekom intends to assert and push through their non compete that it has with Modusir.

Roger Entner 2m54s

I'm just wondering how that's gonna play out. An American court will look at it and say like, this is a German non compete between a German company in Germany, we're in The US, you're not competing with each other, right? Modisier did not have responsibilities for T Mobile USA. So good luck is my opinion here. Now, has not announced yet when up to Modusia will start, but they said that Joe would stay until, you know, the end of first quarter twenty twenty seven.

Don Kellogg 3m30s

Presumably that's when he would start, right?

Roger Entner 3m33s

We'll see. I don't think that there is, I don't know, I haven't read his non compete, but first quarter twenty twenty seven would be a one year since he left, right, Deutsche Telekom. And so it's interesting, there's like this pipeline now from Deutsche Telekom, you know, the Germans are taking over, right? You have Updoo being in charge of technology and the networks for Verizon, the Chief Strategy Officer of AT&T is also a German who was the Chief Strategy Officer of Deutsche Telekom, and so there is quite some talent picking when it comes to that.

Don Kellogg 4m10s

Well, and don't forget Srini, right? I mean, he's also from TT.

Roger Entner 4m13s

But yeah, but that's the way the European view T Mobile USA. T Mobile USA views itself as the most valuable telecom company in the world. I would say Deutsche Telekom views them as the most valuable subsidiary in the world, which is also a little bit of chafing always going on, so yeah.

Don Kellogg 4m33s

Cool. Well, it should be interesting. It looks like he's got a background in Open RAN, cloud infrastructure, AI driven network automation. Those are all things I think that'll be valuable for somebody running network at Verizon.

Roger Entner 4m43s

Has the PhD, originally from Ethiopia, German passport, all of these things, right? Right, right.

Don Kellogg 4m52s

So next item, NTIA has something to say about memory prices. You want tell us about that?

Roger Entner 4m57s

Well, yeah. NTIA, TIA, and quite a few other industry associations wrote a letter to the White House and Secretary Besant Lutnick about a topic that we raised already here, and that is the sky high prices of memory, and that it is very expensive. If it would be only expensive, it would be one thing. But we're seeing and starting to see shortages of memory or things like routers, medical devices, you name it, because AI and computers are absorbing all memory that there is. I know that the router prices that some of the telcos are paying have gone up by fifty, sixty, 70%, And when you try to switch home internet providers, when you are trying to upgrade a customer with a new router, that will cost you or it will make it even harder.

Roger Entner 5m58s

So, it's one of these things where, you know, to keep competition alive in the telecom sector, memory is absolutely critical in routers. You know, I would expect the new iPhones that are going to come out from Apple to be more expensive. And the reason that we will be given is higher memory prices.

Don Kellogg 6m21s

Well, mean, it'll be interesting to keep an eye on it because there's no real end in sight. Nope. As far as the growth of AI and kind of other purposes that folks are using memory chips for. So, you know, buckle up folks.

Roger Entner 6m33s

If you look at it in the computers that we put on the desk of our people, what did we pay for 128 gig? Like $200 ish? $300 ish?

Don Kellogg 6m42s

I mean, the price of RAM is effectively doubled.

Roger Entner 6m44s

Per throughput? Yeah. It's nuts. We love AI and we use it intensively here. And we have an AI solution that we've sold to carriers.

Roger Entner 6m54s

It's phenomenal and mind blowing, but it needs RAM. It needs hard disk. The whole supply chain for computers and therefore for electronics has become under such intense strain. Also on the telecom side, and if we digress here, you know, it's like what we picked up at ConnectX and at Fiber Connect, you know, the bandwidth demands have just gone through the roof. The demand for AI data centers is actually rewriting and redesigning the architecture of the internet.

Roger Entner 7m29s

It's bonkers. Absolutely bonkers.

Don Kellogg 7m31s

Alright, well, we'll talk to you next week and we're gonna have a wonderful guest and folks definitely tune in for that for our three hundredth episode.

Roger Entner 7m39s

Yeah.

Don Kellogg 7m40s

Talk to you next week.

Roger Entner 7m41s

Thank you. Bye bye.