Verizon stays on course with DSS, mmWave despite COVID-19

Verizon
Verizon CEO Hans Vestberg acknowledged the company is looking at Ligado's L-Band spectrum. (FierceWireless)

Verizon’s 5G strategy has been laser-focused on using millimeter wave (mmWave) spectrum in dense urban areas to deliver super-fast speeds, although the signals don’t travel far, meaning more cells are needed to densify, adding to the cost.

Wall Street analysts have questioned the strategy for some time now, and some wonder if the changes in consumer behavior due to COVID-19 could change that approach. Short answer: Nope.

Verizon CEO Hans Vestberg was asked about that during the company’s first-quarter conference call on Friday – a call that he acknowledged right off the bat was unprecedented even for him, who previously has led earnings conference calls amid dramatic economic turmoil. This time is different, he said, because it’s a healthcare crisis that affects everyone around the world.

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mmWave strategy

Verizon’s mmWave strategy includes stadiums and arenas in the dense urban areas where people are not congregating today. Craig Moffett of MoffettNathason asked if Verizon was reconsidering its spectrum strategy given the change in social patterns that might suggest a strategy around coverage versus dense urban usage, or whether it’s a short-term blip. 

“It’s still to be seen, first of all, of what will be the social patterns” over time, Vestberg said, adding that he’s still confident that dense urban areas will continue to be dense urban areas where people live and they tend to see a lot of usage.

“It’s just that we see less movement of people because they’re staying home,” he said. “We are not changing the strategy of how we execute,” both on the broader nationwide as well as city deployment. “Ultimately, we see that as being a very compelling offering” in the future.

As for mid-band spectrum, Verizon continues to see the C-band as attractive because it offers good coverage and it's encouraged that the FCC is planning to start that auction in December.

Asked about its interest in the L-Band and availability now of Ligado Networks’ spectrum, “we still feel that there are several challenges” within the band, Vestberg said. For one thing, that frequency is not used anywhere in the world, which means there's no equipment or handsets and “you need an ecosystem. That’s so important.”

But with all frequencies and spectrum, “we are of course looking into it,” and it has done so for several years. Ligado has been around for about 10 years, so “it’s nothing new.”

The FCC granted Verizon and other carriers the ability to borrow spectrum from others for 60 days during the pandemic. Vestberg thanked the FCC for acting so rapidly to allow that lending of spectrum and referred to a slide showing that when excluding the temporary AWS spectrum from the picture, Verizon’s network is holding up well capacity-wise during the pandemic.

RELATED: Verizon sticks behind ambiguous 2020 DSS rollout plan

On top of that, it continues to add capacity and put in dynamic spectrum sharing (DSS), “which I can report that the tests are going very well. We’re on plan for putting that opportunity” into the hands of Tami Erwin, EVP and CEO of Verizon Business Group, and Ronan Dunne, EVP and CEO of Verizon Consumer Group, to decide when they want to turn that on nationwide. The DSS is what is going to enable Verizon to offer a nationwide 5G service this year.

“I think we have a very good spectrum strategy with the spectrum we have and … we’re going to continue with that,” he said.

Verizon said during its analyst day in February that it planned to use DSS commercially the second half of this year, and he was asked if there’s any change to that, as well as to plans to deploy five times more small cells this year, given the patterns emerging during the pandemic.

RELATED: Verizon pledges 5x more small cells in 2020

Vestberg said there are no supply chain issues affecting its ability to deploy DSS and the same goes for its plans for small cells.

"We have of course complications with some municipalities,” but “our team is all around that and working with municipalities” to find new ways to get digital approvals. “All in all, we are not giving up on those targets.”  

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