Verizon: Around 62% of all wireless deployments in 2017 were small cells

Verizon said it continues to work to deploy small cells, which are essentially mini cell towers that sit atop structures like light poles. (Verizon)

Verizon claims that it has deployed a significant number of small cells in its efforts to improve its wireless network, but the carrier has never put any specific figures or metrics around that effort. Now a new FCC filing by the carrier sheds some light on exactly how critical small cells are to Verizon’s wireless network efforts, and how extensive its deployments are.

“In 2017, approximately 62% of Verizon’s wireless deployments were small cells, a figure that will only grow larger as we deploy 5G in 2018 and beyond,” the carrier wrote in a recent FCC filing. “Small cells are needed to meet exploding consumer demand for data, drive innovation, create new jobs, and fuel new services and capabilities such as smart communities, connected cars, smart farming, and the Internet of Things.”

The carrier noted that its definition of “small cell” includes “small wireless facilities including small cells, distributed antenna system nodes, and small 5G base station equipment.”

Verizon has made no secret of its efforts to densify its wireless network in order to meet customers’ data demands; indeed, company executives have repeatedly claimed that the operator commands the “largest small cell deployment” in the United States. But until now there has been little hard data to contextualize Verizon’s assertions.

If more than half of Verizon’s spending on wireless deployments is centered on small cells, that likely translates into billions of dollars per year. For example, according to Wall Street research firm Scotiabank, Verizon spent an estimated $10.3 billion on its wireless capex in 2017. While that figure likely includes everything from software to network management, it nonetheless provides an indication of the sheer bulk of Verizon’s spending on small cells and related wireless technologies.

Indeed, Verizon’s CEO obliquely hinted that the company’s spending on small cells could increase in the months and years to come as it works to build out 5G network technology and obtains permission from cities and other local regulators to install the gadgets. Specifically, Verizon’s Lowell McAdam said the company has been working to densify its wireless network in advance of its launch of fixed wireless 5G services in Sacramento, California, and three to five other cities this year, and that he is “personally out meeting with some of the mayors talking about what we're going to be providing and the reception has been extremely positive.”

“So, as you know, it takes a little while to work through the city governments and get these things approved. But Sacramento is a terrific model for us,” McAdam said, according to a Seeking Alpha transcript of Verizon’s quarterly conference call with analysts. “We continue to build that partnership and I wouldn’t suspect it'll be too much longer before you'll see the other cities announce.”

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"The networks that we're building today, and have been building for a while, are what we call low and tight,” explained Nicola Palmer, Verizon’s SVP and chief network officer for its wireless network, during a meeting on the sidelines of the recent Mobile World Congress trade show in Barcelona, Spain. "That's the best way to serve an almost insatiable demand from our customers is to not build 200-foot macro [cell towers], it's to go low and tight, serve the demand as close to where it originates as possible. And that's why we've been building these networks for a few years now. We've got more small cells than, we believe, anyone else in the U.S. There's lots of talk about that too. But we've been at this game for a while, and it's serving customers well."

Palmer declined to say how many small cells Verizon operates.

Interestingly, other operators have begun raising the curtain on their own small cell rollout targets. Sprint, for example, recently said it would deploy roughly 40,000 outdoor small cell solutions, 15,000 strand mounted small cells through the company’s partnerships with cable companies, along with the deployment of up to 1 million Sprint Magic Boxes. Meantime, T-Mobile said it is embarking on a “significant” small cell program whereby it will roll out 25,000 small cells in 2018 and early 2019. “This is on top of the approximately 18,000 small cells and DAS nodes already rolled out as of the end of 2017,” the company said.

Verizon’s reluctance to place figures around its own small cell efforts may be due to the trouble AT&T faced several years ago with its own small cell rollout efforts. The company said that as part of its Project Velocity IP network initiative it would deploy 40,000 small cells on its network by the end of 2015, but subsequently admitted it was not able to achieve that goal. AT&T since then has remained mum on its small cell rollout figures.