Verizon CEO Hans Vestberg is among those attending this week’s “summer camp for billionaires” in Sun Valley, Idaho, where he’s evangelizing 5G.
Appearing on CNBC's Squawk program from the Allen & Co. event where some of the biggest names in tech and entertainment are meeting, Vestberg said Verizon sees three different business cases with 5G, “which is very different from any other in the market.”
The first is the mobility case where consumers are purchasing 5G phones. “We see more and more adoption,” he said. More 5G phones are coming out, and that’s something “we’re going to see much more of.”
Second, Verizon offers Mobile Edge Compute (MEC), together with Amazon and Microsoft, and that’s basically an enterprise solution that uses 5G at the network edge for cloud services. Third, fixed wireless access (FWA) addresses the last mile, where 5G is used instead of fiber or DSL.
All of those will start happening “big time” right now and into next year. It’s “an exciting time,” with people starting to come back to urban places, including stadiums, he said, giving a plug for the 5G performance center that Verizon built with the Phoenix Suns NBA team.
Early morning interview with @SquawkCNBC @JBoorstin about 5G, return to work, streaming services and the success of the @Suns in the @nba playoffs with the Verizon 5G performance center pic.twitter.com/97fJe23Ofz— Hans Vestberg (@hansvestberg) July 7, 2021
Of course, he was asked to respond to rival T-Mobile’s barrage of claims about having the broadest 5G coverage – including reaching 300 million people with its Extended Range (600 MHz) 5G. T-Mobile clearly has the lead in 5G coverage, something it’s repeating often in hopes of getting consumer perceptions to catch up to reality.
Vestberg said Verizon, which dominated the LTE era, will continue to have the best network “for a long, long time.” Besides low-band spectrum, it will use its millimeter wave (mmWave) technology for 5G, as well as the C-band that starts to become available later this year.
“We’re going to give the best performance in this market as we’ve always done… We feel really good about our 5G situation,” he said.
Verizon also has some unique content at its disposal to attract customers to 5G, including Disney+, Discovery+, Apple Music and most recently, Apple Arcade and Google Play. But he indicated that Verizon will be cautious about adding more content so customers aren’t inundated with too much they don’t use, but “definitely we’re talking to a lot of people,” including some at Sun Valley this week.
Foot traffic returning
Several factors drive what’s happening now, including a change in usage patterns, he said. Consumers are using wireless data more and in different places. The economy is coming back, and 5G is happening – all at the same time.
During the pandemic, Verizon closed a lot of stores, and some of them remained that way earlier this year, but that’s starting to change. Now, “we have all our stores open. We see more foot traffic coming back,” Vestberg said.
Indeed, analysts at Morgan Stanley said in a July 1 research note that Verizon has “gotten more promotional in recent months” – first with a $1,000 offer to new customers and, more recently, with an aggressive 5G upgrade offer for existing customers. That should help its second-quarter results, which the company reports on July 21. AT&T reports Q2 on July 22.
“This should help Verizon return to subscriber growth this quarter, while we will be looking to see if AT&T can sustain their strong churn performance of recent quarters,” wrote the Morgan Stanley team led by Simon Flannery. “Our wireless store traffic analysis shows improved momentum from Verizon late in the quarter. We expect Cable to have another solid wireless quarter as they expand their offerings as well, and we will look to learn more from Dish and their upcoming 5G launch in Las Vegas in September.”
Analysts at Cowen also said they’re raising their gross add estimate for Verizon amid elevated volumes driven by its newly launched upgrade campaign and increased activity in the switcher pool. They now expect postpaid phone net adds of 199,000 at Verizon for the second quarter of 2021, compared with expectations for 443,000 net adds at AT&T and 680,000 at T-Mobile.