Verizon’s engineers received a shoutout from CEO Hans Vestberg during his appearance Thursday on the company’s Up To Speed event, where he said they’re doing a “fantastic job out there,” both in the field and in the network planning stages.
The comments came after Vestberg discussed the three new markets where Verizon is offering its 5G Ultra Wideband service, which uses millimeter wave (mmWave) spectrum. It also happens to be National Engineers Week, so there’s that.
Verizon’s Ultra Wideband is now available in parts of Sacramento, Seattle and Pensacola, Florida. Those cities also are covered with Verizon’s 5G Nationwide service, which uses lower spectrum bands and isn’t as fast as the service that uses the higher bands.
Verizon announced last fall that it was rolling out new Customer Premises Equipment (CPE) to make its fixed wireless access (FWA) service more attractive. At the time, it said the new gear would be available in several cities, but customers in Sacramento wouldn’t get it until 2021. Now, it’s available for eligible Sacramento customers as well.
Vestberg also reminded V Teamers to remain mum if they’re asked about the C-band auction. The quiet period is still in effect until 6 p.m. Eastern time on March 10, at which time Verizon will kick off its 2021 Investor Day event.
Plenty of people not directly involved in the auction are talking about it, though. Not including clearing costs, Verizon spent more than $45.5 billion in the auction to acquire C-band, or 3.7 GHz, licenses. Some of the spectrum will be ready by the end of this year, but much of it won’t be available until 2023.
Morgan Stanley analysts said they believe Verizon will reach out to Intelsat and SES to see whether they can work with them to accelerate clearing timelines. It may be possible to free up some of the category ABC/BC spectrum ahead of December 2023 in certain markets, but “we would note that the clearing plan requires building and launching several satellites, so there are likely to be constraints on moving this timeline up,” wrote analyst Simon Flannery. “Note also that the December 2023 deadline is not set in stone, and while the satellite operators say they are on target, and have significant financial incentives, satellite deployments are often subject to lengthy delays/technical or other issues.”
Verizon also gets a lot of criticism for focusing so heavily on mmWave, where signals are shorter and propagation characteristics limit their ability to travel through buildings or other obstacles. That generally translates into higher equipment/deployment costs, although as the analysts at MoffettNathanson noted, deploying at 3.7 GHz has its own set of challenges.
“Given the propagation characteristics of C-Band, one might reasonably ask whether having C-Band spectrum in markets other than the largest ones will prove worthwhile,” wrote analyst Craig Moffett. “Verizon clearly believes there is a deployment case to be made everywhere. But, again, that will come only at a stupendous cost.”
T-Mobile, which spent $9 billion in the C-band auction, already acquired a bevy of mid-band spectrum through its $26 billion merger with Sprint, a figure that analysts point out is about half of what Verizon is paying for the C-band licenses. Sprint and before that, Clearwire, stitched together the 2.5 GHz layer. For years, they bragged about the significance of that investment, and now it’s coming into play in full force, as T-Mobile will enjoy a head-start and lead in the mid-band 5G deployment for what some believe could be at least 18 months.
To be clear, Verizon’s purchase of the C-band licenses should ultimately satisfy its 5G spectrum needs, wrote analysts at LightShed Partners. “But the majority of that spectrum will come beyond 2021. In the meantime, its thinner A-Block allocations will present a challenge relative to what T-Mobile can deploy today with its deeper 2.5 GHz spectrum position,” wrote LightShed’s Walter Piecyk. “The window of opportunity has been extended for T-Mobile.”
Piecyk and colleagues expect Verizon and AT&T to cite Carrier Aggregation as the near-term solution for their thin A-Block winnings. “We remain skeptical of these claims. We have been early and vocal in identifying the challenges of 5G Carrier Aggregation and DSS,” he wrote. “These concerns have largely proven to be true. Qualcomm’s latest modem iterations should provide a solution, if Apple elects to include them in the next iPhone.”