Verizon execs dismiss network concerns about unlimited data

Verizon recently rejoined the unlimited bandwagon
Verizon said its network is performing well following the launch of unlimited data plans

Verizon executives dismissed concerns that its network is struggling to handle increased traffic stemming from the launch of its new unlimited data plans.

The nation’s largest wireless network operator hosted a conference with investors Monday, using the event as a podium to push back against claims its data speeds have slowed since the February launch of unlimited offerings.

“Where Verizon came out guns blazing was in defending their network, the investments it has made there and calling into question some of the accusations made against it in regard to performance,” Jennifer Fritzsche of Wells Fargo Securities wrote in a research note. “When asked about the 600 MHz auction, Verizon seemed to have no regrets about not being there given its large upper 700 MHz C Block holdings … The point was made that Verizon’s current lead in the RootMetrics tables has never been higher than it is today.”

Verizon finally launched an unlimited data plan in mid-February, joining its rivals and reversing course after years of decrying the wisdom of offering all-you-can-eat on a high-speed wireless network. But the increased traffic sparked by unlimited data has slowed Verizon’s network speeds in recent weeks, T-Mobile CEO John Legere said last month.

“An interesting thing has happened since Verizon announced unlimited, and it won’t show up until you get to the next quarter’s results,” Legere said during T-Mobile’s earnings call a few weeks ago. “Verizon’s network has slowed down 14%, and they are now slower on the 4G LTE side than AT&T. And in the same time, the speeds on our network have grown 10%. So when we say there’s only one network built for unlimited, it’s clearly ours.”

A T-Mobile spokesperson said that data was determined by using Ookla’s Speedtest app.

The quality and footprint of Verizon’s network has long been a key differentiator for the No. 1 U.S. carrier, of course, and it still consistently ranks at the top of results from third-party testing companies. The network-performance gap has narrowed in recent years, though, as Verizon’s smaller rivals have built out their LTE networks and leveraged new technologies and architectures.

But Verizon said Monday that the capacity of its network has increased fourfold in San Francisco and other markets where it is deploying small cells, Amir Rozwadowski of Barclays noted. Roughly 50% of Verizon’s voice traffic is now on VoLTE, Rozwadowski said, and the carrier is looking to unlicensed LTE to further boost capacity.

“Management further reiterated the importance of its multi-service fiber strategy as part of its densification initiatives, noting that in regions such as Boston it is deploying a level of breadth and capillarity that is simply not available in the market (e.g. 1,700 strand build-outs),” Rozwadowski wrote in a research note. “These builds should also lay the foundational support for its 5G strategy.”