The MoatWide moat

Verizon (VZ) — moat facet

Verizon's moat keeps any new national network out of America, but after $53 billion of C-Band it earns about 7% on capital, roughly what that capital costs.

Verizon's moat is wide and expensive. Nobody can build a national wireless network without government licences, towers, fibre backhaul and a decade of work, and Verizon's licences alone were carried at $158,159 million in June 20261. On top of that sits a customer base that rarely leaves: 94,098 thousand postpaid phones churning at 0.92% a month2.

Verizon return on invested capital against a 7% hurdle (%)10.8201512.7201711.320198.720217.320225.020237.020247.12025Moat Explorer calculation from SEC EDGAR XBRL, repo method; 2017 flattered by tax reform
From double digits to the hurdle in six years.

The problem is what it costs to keep. Return on invested capital, computed from the filings, was 10.8% in 2015 and 11.3% in 2019, then 7.3% in 2022, 5.0% in 2023 and 7.1% in 20253, after the $45.5 billion C-Band purchase4. Against a hurdle of about 7%, the moat now earns roughly its cost of capital. Stockanalysis estimates a trailing return of 8.27% against a cost of capital of 4.24%5; the difference is mostly the hurdle chosen.

Four facets carry the moat. The Airwaves on the Balance Sheet is the barrier to entry. The Postpaid Phone Base is the customer lock-in. Cost Under a New Chief Executive is the scale advantage, now being pushed hard. Fibre and the Home is the new bet on convergence.

The moat protects a business that has not grown. Revenue rose from $131,620 million in 20156 to $138,191 million in 20257, about 0.5% a year8, and operating income fell over the same decade910. A wide moat that keeps a company from shrinking is still worth something, but it is not the same as one that makes it grow.

The barrier has one more layer that rarely gets counted: time. The FCC renews licences for ten-year terms11, auctions are occasional, and fibre is laid a street at a time. A rival with money but no licences would have to wait for the next auction, then build for years before it could offer a national service. That is why the fight in American wireless is among three incumbents plus resellers riding their networks, rather than a newcomer building a fourth; the 10-K names AT&T and T-Mobile as the national rivals12 and the cable companies as resellers13.

The verdict is wide, on the strength of the barrier. What would falsify it is the return: if return on invested capital is below 7% for 2026 and 2027, with Frontier counted, the moat will be keeping out rivals while charging the owners more than it earns them.

Moat trajectory: Holding steady

ROIC 7.1% in 2025 against about 11% in 2019; churn and net adds improving in 2026.

The number that tests this moat
Moat Explorer calc
Return on invested capital vs a 7% hurdle
7.1% (2025), against 11.3% in 2019 and 5.0% in 2023; hurdle about 7%

The moat's economic value; below 7% in 2026 and 2027 with Frontier counted would mean it earns less than it costs.

How it's calculated: NOPAT (operating income after tax) over average operating invested capital (total assets less current liabilities less cash), SEC EDGAR XBRL, repo method; C-Band licences in invested capital from 2021.
Source: Moat Explorer ROIC calculation from EDGAR ↗
Aspects of the moat
DIG DEEPER 01
The Airwaves on the Balance Sheet
Spectrum keeps a fourth national network out of America, but the $53 billion C-Band bill cut Verizon's return on capital from 11% to 7%.
DIG DEEPER 02
The Postpaid Phone Base
Verizon's 94 million postpaid phones churn at under 1% a month and pay for the whole company, but they have stopped paying more.
DIG DEEPER 03
Cost Under a New Chief Executive
Verizon's turnaround is a cost story first: 13,000 positions cut and a record 40.1% margin, on a shared network whose scale rivals cannot easily…
DIG DEEPER 04
Fibre and the Home
Frontier made Verizon a fibre company in 31 states, a bet that phones and home internet on one bill churn less, but fibre on its own earns a steady…
References
  1. ReportedNobody can build a national wireless network without government licences, towers, fibre backhaul and a decade of work, and Verizon's licences alone were carried at $158,159 million in June 2026.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - broadband statistics: fiber and fixed wireless connections and net additions. — Q2 2026 · publ. 24 July 2026 · source ↗
  2. ReportedOn top of that sits a customer base that rarely leaves: 94,098 thousand postpaid phones churning at 0.92% a month.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - operating statistics: connections, net additions, churn, ARPA, upgrades and broadband. — Q2 2026 · publ. 24 July 2026 · source ↗
  3. Moat Explorer calcReturn on invested capital, computed from the filings, was 10.8% in 2015 and 11.3% in 2019, then 7.3% in 2022, 5.0% in 2023 and 7.1% in 2025, after the $45.5 billion C-Band purchase.
    Moat Explorer calculation, repo method (tools_roic_edgar.py run on a scratch copy with CIK 732712) on SEC EDGAR XBRL: return on invested capital 10.8% (2015), 9.1% (2016), 12.7% (2017), 8.2% (2018), 11.3% (2019), 8.8% (2020), 8.7% (2021), 7.3% (2022), 5.0% (2023), 7.0% (2024), 7.1% (2025). — FY2015-FY2025 · publ. September 2026 · source ↗
    Method: NOPAT (operating income times one minus the effective tax rate, clamped 0-35%) divided by average operating invested capital (total assets less current liabilities less cash), SEC EDGAR XBRL. 2017 is flattered because the tax-reform benefit clamps the rate to zero; 2021 onward carries about $53 billion of C-Band licences and clearing costs in invested capital; 2023 is cut by the $5.8 billion goodwill impairment.
  4. ReportedReturn on invested capital, computed from the filings, was 10.8% in 2015 and 11.3% in 2019, then 7.3% in 2022, 5.0% in 2023 and 7.1% in 2025, after the $45.5 billion C-Band purchase.
    Verizon Communications Inc. Form 10-K for fiscal 2023 - the C-Band licence payments and the $5.8 billion Business goodwill impairment. — FY2023 · publ. February 2024 · source ↗
  5. Third-party estimateStockanalysis estimates a trailing return of 8.27% against a cost of capital of 4.24%; the difference is mostly the hurdle chosen.
    stockanalysis.com, Verizon statistics, 28 September 2026: enterprise value $385.24bn, EV/EBITDA 7.54, return on invested capital 8.27%, weighted average cost of capital 4.24%, free cash flow $21.53bn. — September 2026 · publ. 28 September 2026 · source ↗
  6. ReportedRevenue rose from $131,620 million in 2015 to $138,191 million in 2025, about 0.5% a year, and operating income fell over the same decade.
    Verizon Form 10-K for fiscal 2019, Exhibit 13 - selected financial data for 2015-2019 (revenue, operating income, net income, EPS and dividends). — FY2015-FY2019 · publ. February 2020 · source ↗
  7. ReportedRevenue rose from $131,620 million in 2015 to $138,191 million in 2025, about 0.5% a year, and operating income fell over the same decade.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  8. Moat Explorer calcRevenue rose from $131,620 million in 2015 to $138,191 million in 2025, about 0.5% a year, and operating income fell over the same decade.
    Moat Explorer calculation from Verizon's reported figures ($ millions unless stated; calendar years). Revenue and profit over the decade: revenue 2015-2025 (138,191 / 131,620) ^ (1/10) - 1 = about 0.5% a year; 138,191 / 131,620 - 1 = +5.0%; range 138,191 - 125,980 = about 12.2bn; 2027 revenue of 142bn would need (142 / 138.191) ^ (1/2) - 1 = about 1.4% a year; operating income 29,259 / 30,615 - 1 = -4.4%; net income 17,174 / 17,879 - 1 = -3.9%; diluted EPS 4.06 / 4.37 - 1 = -7.1%; total assets 404,258 / 244,175 - 1 = +65.6%. Segments 2025: Consumer share of segment operating income 29,628 / (29,628 + 2,532 = 32,160) = 92.1% (2024 29,484 / 31,542 = 93.5%; 2023 29,011 / 31,077 = 93.4%); Business share 2,532 / 32,160 = 7.9%; Q2 2026 Consumer 8,032 / (8,032 + 991 = 9,023) = 89.0%, Q2 2025 7,643 / (7,643 + 724 = 8,367) = 91.3%; Consumer operating margin 29,628 / 106,807 = 27.7%, Business 2,532 / 29,069 = 8.7%; Business share of segment revenue 29,069 / 135,876 = 21.4%; shared network and service costs 17,991 + 9,717 = 27,708, Business share 9,717 / 27,708 = 35.1%; Consumer share of segment EBITDA 43,801 / (43,801 + 6,644) = 86.8%; Consumer revenue 2025 106,807 / 102,904 - 1 = +3.8%, 2023-2025 106,807 / 101,626 - 1 = +5.1%; Consumer service revenue 80,617 / 77,127 - 1 = +4.5%; Consumer equipment 21,779 - 23,930 = -2,151, about 2.2bn below cost; Business revenue 29,069 / 30,122 - 1 = -3.5%; Enterprise and Public Sector 13,532 / 15,076 - 1 = -10.2%; Business Markets and Other 13,555 / 12,697 - 1 = +6.8%; Wholesale 1,953 / 2,313 - 1 = -15.6%; institutional and wholesale decline (15,076 - 13,532) + (2,313 - 1,953) = 1,904; Q2 2026 Consumer revenue 26,242 / 26,648 - 1 = -1.5%; Business revenue 7,155 / 6,973 - 1 = +2.6%; restatement 7,275 - 6,973 = 302 a quarter; mobility and broadband service revenue 2025 75,923 + 14,940 = 90,863. Customers: T-Mobile postpaid accounts 34,700 - 34,237 = 463 more than Verizon; T-Mobile 34,700 / 31,502 - 1 = +10.2%, 34,700 - 31,502 = 3,198; Verizon accounts 34,237 - 34,646 = -409, -1.2%; ARPA premium 168.35 / 152.91 - 1 = +10.1%; cable lines 10,187 + 12,540 = about 22.7 million; cable Q2 net adds 448 + 406 = 854 thousand, 854 / 184 = 4.6 times; Q2 net adds share 184 / (184 + 432 + 448 + 406 = 1,470) = 12.5%; fibre net adds 155 / 367 = 42%; annual churn at 0.92% a month 0.92 x 12 = 11.0%, about one customer in ten; 0.1 point on 94 million = about 94 thousand phones a month; prepaid churn 3.59 / 0.92 = 3.9 times; prepaid annual loss 1 - (1 - 0.0359) ^ 12 = 35.5%, average life 1 / 0.0359 = 27.9 months, a little over two years; revenue per postpaid line 170.62 / 3.67 = 46.49 (2025), 167.26 / 3.61 = 46.33 (2024); ARPA 2025 170.62 / 167.26 - 1 = +2.0%; ARPA Q2 2026 168.35 / 170.79 - 1 = -1.4%; ARPA H1 2026 167.50 / 170.30 - 1 = -1.6%; wireless service revenue 83,703 / 82,073 - 1 = +2.0%; wireless service share of revenue 83,703 / 138,191 = 60.6%; FWA revenue 2,940 / 2,139 - 1 = +37.4%; FWA revenue share 2,940 / 138,191 = 2.1%; fibre annualised 155 x 4 = 620 thousand; passings 2.0 / 30 = 6.7%; passings to fill 2,000 / 620 = 3.2 times. Spectrum and capital: C-Band 45.5 + 7.5 = 53.0bn; licences share of assets 158,159 / 410,186 = 38.6%; licences over goodwill 158,159 / 30,664 = 5.2 times; licences over equity 158,159 / 105,196 = 1.5 times; wireless service revenue per dollar of licences 83,703 / 157,039 = 0.53; spectrum bought June 2026 1.0 + 3.2 = 4.2bn; capex / revenue 17,011 / 138,191 = 12.3% (2025), 23,087 / 136,835 = 16.9% (2022); capex 17,011 / 23,087 - 1 = -26.3%; capex less depreciation 17,011 - 18,349 = -1,338; ROIC averages 2015-2019 (10.8 + 9.1 + 12.7 + 8.2 + 11.3) / 5 = 10.4%, 2021-2025 (8.7 + 7.3 + 5.0 + 7.0 + 7.1) / 5 = 7.0%; interest expense 6,694 / 5,524 - 1 = +21.2% (2023-2025); Q2 interest 1,985 / 1,639 - 1 = +21.1%; interest / operating income 6,694 / 29,259 = 22.9%. Cost, cash and capital returns: employees 89.9 / 99.6 - 1 = -9.7%; severance 533 + 1,733 + 1,715 + 397 = 4,378, about 4.4bn; adjusted EBITDA margin 49,997 / 138,191 = 36.2% (2025), 48,791 / 134,788 = 36.2% (2024); Q2 2026 operating income 7,179 / 8,172 - 1 = -12.2%; free cash flow Q2 6,426 / 5,167 - 1 = +24.4%; adjusted EPS less diluted EPS 4.71 - 4.06 = 0.65; phones sold below cost 28,976 - 25,470 = 3,506, about 3.5bn; dividends / free cash flow 11,481 / 20,126 = 57.0% (2025), 5,864 / 10,209 = 57.4% (H1 2026); dividends / net income 11,481 / 17,174 = 66.9%; dividends per share 2.735 / 2.230 - 1 = +22.6%, (2.735 / 2.230) ^ (1/10) - 1 = 2.1% a year; dividend cost a quarter 0.7075 x 4,155 = about 2,940; buyback average 3,500 / 72.047 = about $48.58 a share; shares 4,155 / 4,217 - 1 = -1.5%; free cash flow yield 21.53 / 193.94 = 11.1%; cash returned about (11.5 + 4.5) / 193.94 = 8.2% of market value; net unsecured debt 128,682 - 110,053 = 18,629; backlog 55.2 / 58.1 - 1 = -5.0%; backlog months 58.1 / 138.191 x 12 = about 5.0; device receivables 34,004 / 31,308 - 1 = +8.6%, allowance 1,628 / 1,315 - 1 = +23.8%; TracFone 3.5 + 3.0 = 6.5bn plus up to 0.65bn. Valuation: Frontier price / market value 22.3 / 193.94 = 11.5%; market value 193.94 / 253.94 - 1 = -23.6% (against end-2019), 193.94 / 188.06 - 1 = +3.1% (against end-2015); target 51.58 / 46.68 - 1 = +10.5%; year-end market value over net income 188.06 / 17.879 = 10.5 (2015), 217.61 / 13.127 = 16.6 (2016), 215.92 / 30.101 = 7.2 (2017), 232.30 / 15.528 = 15.0 (2018), 253.94 / 19.265 = 13.2 (2019), 243.11 / 17.801 = 13.7 (2020), 215.12 / 22.065 = 9.7 (2021), 165.47 / 21.256 = 7.8 (2022), 158.49 / 11.614 = 13.6 (2023), 168.34 / 17.506 = 9.6 (2024), 171.74 / 17.174 = 10.0 (2025); trailing twelve months to June 2026 revenue 138,191 - 67,989 + 68,693 = 138,895, net income 17,174 - 9,882 + 8,880 = 16,172, 193.94 / 16.172 = 12.0, 193.94 / 138.895 = 1.40 - revenue, profit, costs and growth over time. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Verizon's Forms 10-K and 10-Q, quarterly results releases, the recast segment revenue 8-K, peer results releases (T-Mobile, AT&T, Comcast, Charter) and market data; operands shown in the source line.
  9. ReportedRevenue rose from $131,620 million in 2015 to $138,191 million in 2025, about 0.5% a year, and operating income fell over the same decade.
    Verizon Form 10-K for fiscal 2019, Exhibit 13 - selected financial data for 2015-2019 (revenue, operating income, net income, EPS and dividends). — FY2015-FY2019 · publ. February 2020 · source ↗
  10. ReportedRevenue rose from $131,620 million in 2015 to $138,191 million in 2025, about 0.5% a year, and operating income fell over the same decade.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  11. ReportedThe FCC renews licences for ten-year terms, auctions are occasional, and fibre is laid a street at a time.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - wireless licences, C-Band and spectrum holdings. — FY2025 · publ. 17 February 2026 · source ↗
  12. ReportedThat is why the fight in American wireless is among three incumbents plus resellers riding their networks, rather than a newcomer building a fourth; the 10-K names AT&T and T-Mobile as the national rivals and the cable companies as resellers.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business, competition: named wireless and broadband competitors and resellers. — FY2025 · publ. 17 February 2026 · source ↗
  13. ReportedThat is why the fight in American wireless is among three incumbents plus resellers riding their networks, rather than a newcomer building a fourth; the 10-K names AT&T and T-Mobile as the national rivals and the cable companies as resellers.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business, competition: named wireless and broadband competitors and resellers. — FY2025 · publ. 17 February 2026 · source ↗
Sources
Generated September 29, 2026