On Verizon’s third quarter earnings call Wednesday, CEO Hans Vestberg said that over the last few months the carrier has deployed more radio base stations than it did in all of 2019, speaking to the pace of growing its 5G footprint.
Vestberg said the carrier’s 5G strategy and roll out has remained consistent, but didn’t quantify the deployment with an exact figure.
Earlier this year executives said the operator aimed to roll out more than five times the number of small cells in 2020 than it did in 2019.
Verizon's mmWave 5G footprint has been extremely limited compared to competitors low-band rollouts. However, Verizon’s chief executive noted that the technology team is now rolling out 5G in an environment with “unconstrained supply” for mmWave, which was not the case last year as the carrier was one of the first to deploy high-band 5G and the ecosystem pushed to be ready.
In terms of pace, Vestberg also pointed to the recent expansion of Verizon’s Ultra Wideband 5G service to parts of 19 new cities. The service, which uses high-band millimeter wave spectrum that Verizon sees as a differentiator, is now in limited areas of 55 cities. Verizon also almost doubled the size of the footprint in most of the cities where its mmWave 5G service already launched as part of the “enormously big rollout,” Vestberg said.
Verizon notably timed the launch of its own low-band nationwide 5G service with the debut of Apple’s first 5G-capble lineup of iPhones last week, but that performance is not expected to be much different than 4G. The carrier’s mmWave 5G, meanwhile, is meant to provide “an unparalleled experience” according to Vestberg, who joined Tim Cook on stage at Apple’s event.
He added that the idea is to build a transformative experience, which played into aligning with the iPhone 12 reveal.
To that point, Verizon just demoed peak 5G speeds of 5.06 Gbps by aggregating mmWave spectrum with partners Ericsson and Qualcomm. That was in the lab, not what’s expected in real-world conditions at this point, but nonetheless broke the 5 Gbps barrier on a single device.
It will continue to augment its UWB 5G network with fiber and capabilities like mobile edge compute (MEC), the latter of which has launched at five sites commercially with Amazon. Verizon recently debuted a more powerful customer premises equipment (CPE) that’s self-installable for its fixed wireless 5G Home service that’s available in eight cities, with 10 planned by year’s end.
Still, Vestberg said none of this changes what Verizon has said about its revenue trajectory for 5G, or when it expects to make money from its multi-billion dollar 5G investment, with the different business cases it has. He reiterated Verizon doesn’t expect to see revenues from 5G Home or mobility until 2021, with 5G MEC revenues anticipated in 2022.
“What it shows is that we are really in execution mode right now in bringing monetization on top of our 5G investment,” Vestberg said on the earnings call.
In its earnings report Verizon said it now expects capital spending to land at the high-end of the $17.5 billion to $18.5 billion range it expected for 2020. As of the end of the third quarter, Verizon’s capital expenditures for 2020 were $14.2 billion. That money has been used to support increased traffic on Verizon’s 4G LTE network, its mmWave and low-band 5G buildouts, and significant fiber deployments in more than 60 markets.
The FCC auction for mid-band C-band spectrum is expected to start on December 8, where Verizon is widely expected to bid aggressively. It’s currently the quiet period for the auction, so executives couldn’t discuss C-band on the call.
In a note to investors Wednesday, MoffettNathanson analysts said they still see AT&T as playing defense more so than Verizon, specifically with Big Blue’s very aggressive iPhone 12 offer. However, the Wall Street firm remained unconvinced of Verizon’s mmWave focus, saying the overreliance has left the carrier vulnerable.
While MoffettNathanson thinks “the stars may be aligning for Verizon to at least be a close second” to T-Mobile in terms of amassing a large arsenal of necessary mid-band spectrum, analysts noted there’s still the steps of acquiring and deploying those frequencies.
“That will take time,” wrote senior analyst Craig Moffett. “And it will take lots of money.”