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CNBC Excerpts: CNBC Exclusive: Verizon Chairman & CEO Lowell Mcadam Speaks with CNBC’s David Faber Today

WHEN: Today, Thursday, September 17th

WHERE: CNBC's Business Day programming

Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Verizon Chairman & CEO Lowell McAdam today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000421680, http://video.cnbc.com/gallery/?video=3000421900 and http://video.cnbc.com/gallery/?video=3000421903.

All references must be sourced to CNBC.

MCADAM ON DISH RUMORS

DAVID FABER: AT&T BOUGHT DIRECTV. LEADING SOME TO SPECULATE WELL MAYBE VERIZON WOULD WANT TO BUY CHARLIE ERGEN'S COMPANY DISH. IT HAS AN AWFUL LOT OF SPECTRUM AND IT DOES STILL HAVE A SATELLITE BUSINESS. WOULD YOU HAVE ANY INTEREST?

LOWELL MCADAM: PROBABLY NOT. AND I WANT TO BE CLEAR. I THINK CHARLIE HAS BUILT A GREAT BUSINESS THERE, BUT IT IS INCONSISTENT WITH THE STRATEGY THAT WE ARE ON. IF YOU THINK ABOUT A MOBILE FIRST VIDEO, BUYING A LINEAR TV DELIVERY SYSTEM IS PROBABLY NOT THE SMARTEST FOR US. SO, NO REFLECTION ON THE QUALITY OF THE COMPANY. AND OBVIOUSLY, YOU'VE SAID HE HAS A FAIR AMOUNT OF SPECTRUM WHICH IS ATTRACTIVE – NEEDS TO BE ATTRACTIVE.

FABER: HE HASN'T FIGURED OUT WHAT TO DO WITH IT YET. OR AN EFFECTIVE WAY TO HAVE IT DEPLOYED. HE CAN'T, IT WOULD SEEM, HE DOESN'T HAVE THE ECONOMIC FIRE POWER TO DO IT ON HIS OWN.

MCADAM: WELL THAT IS THE DIFFICULTY. AND YOU KNOW, WE HAVE KICKED AROUND A COUPLE OF OPTIONS WITH HIM ABOUT HOW WE COULD PROVIDE HIM WITH WIRELESS SERVICE AND HE COULD PAY FOR IT WITH SPECTRUM. WE WILL SEE IF ANY OF THAT EVER GOES ANYWHERE. BUT RIGHT NOW, THERE ARE NO DISCUSSIONS WITH THEM AND THERE IS NO PLAN TO PURCHASE THE SATELLITE COMPANY.

MCADAM ON COMPETITORS

MOBILE PLATFORM IS WHAT IT IS. THAT WILL LAUNCH THE END OF THIS MONTH. WE WILL SEE HOW THAT ROLLS OUT IN THE ACCEPTANCE AND WE WILL ADD DIFFERENT CONTENT TO IT. AND THEN THAT PLATFORM CAN BE USED TO GO INTO THE HOME IF WE DECIDE TO DO THAT.

FABER: HOW DO YOU VIEW THE FiOS SO CALLED WIRELINE ASSETS IF YOU WILL? ABOUT THE FiOS ASSETS THEMSELVES. YOU ARE GOING TO HAVE A NEW COMPETITOR BY THE WAY. A FRENCH COMPANY CALLED ALTICE IS NOW GOING TO BE YOUR MAIN COMPETITOR, GIVEN CABLEVISION IS RIGHT NOW.

MCADAM: RIGHT. IN PART OF NEW YORK THEY WILL BE.

FABER: IN PART OF NEW YORK. WELL, A VERY IMPORTANT MARKET WHERE AVERAGE REVENUE PER USER IS PRETTY DARN HIGH.

MCADAM: YEAH, AND IT IS PROBABLY OUR BIGGEST GROWTH MARKET ACTUALLY.

FABER: DO YOU THINK YOU BENEFIT FROM THAT? THIS GENTLEMAN, MR. DRAHI, TALKS A PRETTY TOUGH GAME.

MCADAM: WELL, YOU KNOW WE HAVE HEARD TOUGH GAMES OVER THE YEARS AS PEOPLE HAVE COME INTO THE MARKET WHETHER IT BE WIRELESS OR WIRELINE. AND SUCCESS IN EUROPE OR ASIA DOESN'T NECESSARILY MEAN SUCCESS IN THE U.S. OUR PRODUCT, FUNDAMENTALLY, IS SUPERIOR WHEN YOU HAVE FIBER INTO THE HOME VERSUS ANY OF THE DOCSIS PRODUCTS. WE WELCOME THEM INTO THE MARKET.

MCADAM ON SKINNY BUNDLE

THE SKINNY BUNDLE RIGHT NOW DAVID, WE ARE SELLING BETWEEN 30 AND 40% OF OUR CUSTOMERS ARE BUYING THOSE. THERE IS HUGE DEMAND FOR THOSE THAT DON'T WANT 300 CHANNELS. IT IS A MUCH MORE PROFITABLE BUNDLE. OBVIOUSLY WE ARE THE DISRUPTORS HERE. THE QUESTION IS HOW QUICKLY THE CONTENT PROVIDERS WILL MOVE.

MCADAM ON JOHN LEGERE

FABER: WE GET A LOT OF KICK OUT OF JOHN LEGERE COMING ON. OF COURSE, THE MAN WHO RUNS T-MOBILE, WHO HAS DONE A VERY GOOD JOB IN SOCIAL MEDIA IN TERMS OF USING THEIR BRAND. BUT WHEN HE COMES ON AND CALLS YOU – I'M NOT SURE IF YOU ARE DUMB OR DUMBER – DOES THAT TICK YOU OFF OR IS IT ALL SORT OF PART OF FUN AND GAMES?

MCADAM: YEAH, YOU KNOW, TO BE HONEST I DON'T PAY ANY ATTENTION TO IT. YOU KNOW, I THINK IT HAS WORKED FOR HIM. THAT IS PART OF THE PERSONA OF THE COMPANY. I THINK OUR CUSTOMERS AND OUR INVESTORS, IF I TRIED TO DO THAT, WOULD LOOK AT ME LIKE I WAS CRAZY. SO, MY FOCUS, AND I HOPE THE FOCUS OF THE COMPANY IS LET'S FIGURE OUT WHAT CUSTOMERS WANT, LET'S IMPROVE OUR NETWORK, LET'S IMPROVE OUR PRODUCTS, LET'S KEEP WINNING. I THINK WE ARE DOING A PRETTY GOOD JOB AT THAT AND WE WILL STAY THAT COURSE.

MCADAM ON MILLENNIALS

WE LOOKED AT THE CUSTOMER SEGMENT THAT WE WANT TO GO AFTER, THE MILLENNIALS, WHICH EVERYBODY WANTS TO GO AFTER. THEY ARE NOT BUYING LINEAR TV. 40% OF THEM ALREADY SAY I DON'T HAVE IT, I'VE NEVER HAD IT. AND ANOTHER 20% SAY I GOT IT, BUT I'M PROBABLY GOING TO DISCONNECT IT BECAUSE I DON'T USE IT. THEY ARE JUST FUNDAMENTALLY OPPOSED TO THESE 300 CHANNEL BUNDLES THAT THEY HAVE BEEN GETTING. WHAT THEY WANT IS THAT SNACKABLE CONTENT THEY CAN GO GET WHAT THEY WANT. IT IS MUCH MORE VICE NEWS THAN IT IS ONE OF THE BIG NETWORK NEWS'. IT IS MUCH MORE HUFFINGTON POST. AND IT'S AWESOMENESS TV.

FABER: AWESOMENESS TV? I MISSED THAT ONE.

MCADAM: YEAH I HADN'T HEARD OF IT EITHER, BUT IT IS ONE OF THE MORE POPULAR CHANNELS OUT THERE. THE VOLUME THAT YOU SEE OUT OF THE MILLENNIALS IS IMPORTANT. SO THAT PRODUCT IS NOT TAKING THE BIG FOUR AND 300 CHANNELS AND PUTTING IT ON MOBILE. IT IS A DIGITAL EXPERIENCE THAT THE MILLENNIALS WANT WITH A CAPABILITY, WHICH I THINK IS CRITICAL, IS THIS CLIP AND SHARE. SO IT COMBINES SOCIAL MEDIA WITH VIDEO. SO IF I SEE SOMETHING I LIKE, I CAN ACTUALLY GO IN AND CLIP IT AND I CAN SEND IT TO YOU AND IT BECOMES VIRAL AT THAT POINT. SO OUR ANCHOR IS GOING TO BE THE SPORTS – YOU KNOW WE'VE GOT THE NFL, WE'VE ALREADY ANNOUNCED SEVERAL COLLEGES. THERE IS MORE TO COME AS WE GET TO THE COMMERCIAL LAUNCH. IT WILL BE THINGS LIKE THE HUFFINGTON POST AND AWESOMENESS TV, SOME EPISODIC. SOME WILL BE EXCLUSIVE TO VERIZON, SOME WILL BE MORE OPEN AND ANY CARRIER, IF YOU ARE ON ANOTHER CARRIER, YOU CAN DOWNLOAD IT AND YOU ARE OFF TO THE RACES.

FABER: LOWELL, YOU'RE A PHONE GUY AND HERE YOU ARE TALKING ABOUT AWESOMENESS TV.DO YOU HAVE THE TECHNICAL EXPERTISE SO TO SPEAK AND THE TEAM NECESSARY TO ACTUALLY NAVIGATE THIS NEW WORLD?

MCADAM: WELL THAT IS PART OF THE REASON WHY WE DID THE AOL DEAL. SO I AM VERY HAPPY WITH THE COMPETENCE THAT WE HAVE WITHIN OUR BUSINESS, BUT WE DIDN'T FEEL WE COULD SCALE IT QUICK ENOUGH, DAVID. SO THAT IS WHY WHEN WE STARTED TALKING WITH TIM AND WE SAW WHAT WE HAD BUILT WITHIN AOL AND THE EXPERTISE THAT THEY HAD GOT BUILDING CONTENT AND DELIVERING CONTENT AND THEN THE WHOLE ADVERTISING PIECE WAS CRITICAL TO THE MONETIZATION OF THAT, THAT IS WHY WHEN WENT IN AND DID THAT.

FABER: BECAUSE THAT STARTED OUT ABOUT TALKS OF A JOINT VENTURE, I BELIEVE.

MCADAM: IT DID. ABSOLUTELY.

FABER: AND I WAS ALWAYS CURIOUS AS TO WHY IT DIDN'T END UP THERE. AND SOME PEOPLE STILL SORT OF AT LEAST TRY AND UNDERSTAND FULLY THE RATIONALE FOR YOUR FULL PURCHASE OF THE COMPANY.

MCADAM: YEAH, NO QUESTION. VERY CLEARLY THAT THE PURCHASE WAS BETTER AND THE REASON IS BECAUSE OF ALL THE INFORMATION THAT WE HAVE ABOUT CUSTOMERS, IF WE COULD COMBINE THAT WHEN YOU ONLY ASK THAT YOU CAN COMBINE IT MUCH MORE FREELY IF IT IS A COMMERCIAL RELATIONSHIP. SO WHEN WE GOT INTO THE DETAILS OF THE PRODUCT SET WE WERE TRYING TO CREATE, IN ORDER TO REALLY BRING THAT ALL TOGETHER AND INTEGRATE IT, IT HAD TO BE A PURCHASE.

MCADAM ON 2016 EARNINGS GROWTH

WE ARE GOING INTO THE DIGITAL SPACE WITH AOL AND WITH OUR OVER-THE-TOP VIDEO PLAY INSTEAD OF LINEAR TV. AND SO AS YOU READJUST THE MODEL, THERE IS GOING TO BE SOME ISSUES WITH EARNINGS AND COMPARABLES. THE COMPARABLES ARE GOING TO BE RELATIVELY FLAT OR PLATEAU BETWEEN '15 AND '16, THEN I THINK FROM '17 ON WE WILL BE BACK ON OUR GROWTH TRAJECTORY.

MCADAM ON PRICING

IN THE PAST WE WOULD GET $200 FOR A PHONE AND THEN THAT WAS IT. WE WOULD MAKE IT UP IN THE SERVICE PRICING. NOW YOU GET THE FULL PRICE OF THE PHONE, BUT IT IS OVER A 24 MONTH PERIOD AND SERVICE PRICING IS COMING DOWN. SO IF YOU LOOK AT OVERALL REVENUE, IT IS RELATIVELY FLAT. BUT THE SERVICE PRICING CHANGED. AT THE END OF THE DAY, THE CUSTOMER STILL BRINGS ROUGHLY THE SAME VALUE TO THE BOTTOM LINE OF THE COMPANY. IT JUST COMES IN IN A DIFFERENT CASH FLOW PATTERN, SO IT DOES CHANGE THE WAY YOUR EARNINGS LOOK.

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