Verizon skirts tough questions on near-term 5G coverage plan

Verizon’s chief executive touted confidence in the carrier’s 5G strategy during its second-quarter earnings call Thursday, but dodged questions about the company’s plan to compete near-term with rivals that have clearer paths for broad 5G coverage.

Verizon has been rolling out mobile 5G service in dense urban areas of select cities using 28 GHz millimeter wave spectrum, with plans to hit 30 cities by year-end. Competitors AT&T and T-Mobile are also deploying mmWave 5G service in limited areas, but unlike its rivals, Verizon has not been vocal about how it plans to deliver near-term 5G coverage outside of small city pockets.

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T-Mobile and AT&T have each promised nationwide 5G coverage next year using their respective low and mid-band spectrum holdings. If T-Mobile’s pending merger with Sprint is approved, it will also get its hands on a large amount of 2.5 GHz spectrum.

Verizon owns a lot of high-band millimeter wave spectrum, which can deliver super-fast speeds and handle capacity needed for next-gen applications, but signals can’t travel very far or penetrate well. Verizon executives previously named dynamic spectrum (DSS) technology as a way to dynamically allocate some of the carrier’s existing 4G LTE spectrum for 5G, though that will take time. Verizon recently told FierceWireless that more than 99% of the carrier’s traffic is running its 4G LTE network, with most CDMA equipment decommissioned and spectrum repurposed to LTE services.  

Responding to questions about market concerns over potentially limited 5G coverage maps and Verizon’s strategy for a 5G coverage layer over the next few years, Verizon CEO Hans Vestberg again pointed to dynamic spectrum sharing (DSS) technology. He also seemed to spin the message as Verizon will deploy 5G when the technology and ecosystem is ready to live up to expectations.

RELATED: Verizon not vulnerable in midband spectrum position, CTO says

“You also want to see that there’s enough handsets and things out in the market before turning on 5G,” said Vestberg on the earnings call. “Because we want to do a transformative feeling of what 5G is, we don’t want to rebrand it and say it’s 5G and you don’t see the difference.”

“I think that we’ll have a coverage map whenever it’s going to be needed for our customers,” he added.

Vestberg acknowledged concerns over the company’s spectrum position, but reiterated he feels confident in Verizon’s 5G strategy and engineering capabilities, though provided few additional details.  

He pushed aside concern that from a pure marketing perspective Verizon wouldn’t have as robust 5G coverage maps in the near-term compared to competitors, even if the experience with lower-band spectrum isn’t significantly better than the carrier’s 4G network.

“Let’s see how that turns out,” Vestberg jabbed. “We first do the things and then we start marketing it. Others might have other strategies.”

“I’m working with the technology weekly to see that we’re doing this right for our customers,” he noted. “Just be confident that our company Verizon will continue to execute on the real 5G.”

RELATED: Marek’s Take: Dynamic spectrum sharing may change the 5G deployment game

T-Mobile CEO John Legere recently criticized Verizon for what he called a millimeter wave-only 5G strategy, saying on the company’s earnings call last week “it won’t work,” and that Verizon’s “kind of dead in the water without a strategy right now.”

The Verge on Monday reported Verizon has a “multi-spectrum strategy” for expanding 5G across the country, but Verizon’s VP of network and technology Heidi Hemmer declined to provide the outlet with specifics on what spectrum, saying the secrecy offered the company a “competitive edge.”

T-Mobile CTO took his own jab on Twitter, questioning Verizon’s secrecy:

While Verizon may have big long-term plans for 5G, some analysts think the carrier’s near-term competitive edge is waning.

“Their [Verizon’s] almost slavish commitment to millimeter wave spectrum as the basis of their 5G deployment strategy leaves them well positioned for high speed connectivity in dense urban settings, but leaves them exposed everywhere else, without a clear near-to-medium term answer for a 5G coverage layer,” wrote MoffettNathanson Senior Analyst Craig Moffett in a Thursday research note.

Moffett added that Verizon has “arguably ceded competitive advantage, at least for a time,” to AT&T and T-Mobile.

Here are some highlights from Verizon’s second-quarter results:

• Overall Verizon posted 451,000 total postpaid net additions, including 245,000 postpaid phone net adds.
• Postpaid phone churn was 0.76%
• Verizon lost 213,000 prepaid connections
• In its consumer segment Verizon reported 73,000 postpaid phone net additions and postpaid phone churn of 0.72%. It added 172,000 business postpaid phone connections and reported 0.97% churn.
• Consolidated revenue was down 0.4% to $32.1 billion and adjusted EBIDTA was up 1.8% to $12.1 billion.
• Wireless service revenue in the consumer segment was up 2.5% year over year to $13.5 billion
• Business segment wireless service revenue was $2.8 billion, up 6.1% from the year prior.