If Dish Network does emerge as an MVNO and ultimately gets the chance to build out a national 5G network, it’s not going to keep Verizon executive Ronan Dunne up at night. At least, that’s one take-away from his appearance at the Bank Of America Merrill Lynch conference on Wednesday.
As to the proposed Sprint/T-Mobile merger, “as a firm, we haven’t expressed a view. But it’s fair to say that it’s complicated,” he said, adding that Verizon has a clear strategy and is focused on execution where others may be distracted by other things. The question becomes: can and when will Dish be an operator? So far, it’s shown no evidence of that, he said.
Dish acquired a lot of spectrum over the years and insisted last year that it was building a Narrowband IoT network nationwide, which was required to meet spectrum build-out requirements. Plans called for the network to cover 70% of the population by March 2020. But as the U.S. Department of Justice was weighing the T-Mobile/Sprint merger, Dish swept in and became part of a deal that would set it up as a fourth facilities-based national competitor, complete with 800 MHz spectrum from Sprint and the Boost Mobile business, among other things. The merger still faces opposition from a growing number of state attorneys general, with a trial to start in December.
“I think the question for the attorneys general is why is Dish a better operator than Sprint, which is an interesting question,” Dunne said, adding that he’s currently focused on the competitors that are on the field. “I don’t see, if that deal goes through and Dish’s arrival, while I’m respectful of all of my competitors, I don’t see it as a reason to divert me from the strategy that we have today,” which is foundational around network as a platform and delivering the best connectivity.
Based on his European experience, Dunne, who oversees the Verizon Consumer Services Group, said there have been some truly successful MVNOs in Europe and he pointed to Tesco Mobile, a joint venture between O2 and Tesco, as probably one of the most successful MVNOs in the European market. It became a very targeted and well executed business.
With some MVNOs, “I think with some of these the challenge is a lack of clarity around exactly what segment is being served and whether or not the economics of those deals are sustainable in an unlimited world,” he said.
As the market evolves, “we have a very clear view that we want to be the partner of choice to our MVNO partners and we see them as complementing the Verizon-branded premium solution that’s offered in the market.” Verizon’s network supports the wireless offerings of MVNO partners like Comcast and Charter Communications.
An MVNO needs a combination of knowledge and operational capabilities and the ability to partner really well, according to Dunne. The challenge for a new entrant, whether it be Dish or others, is which of those skills do they have and how much of that do they need to bring in. Building a network in the U.S. at the same time most of the other carriers are flat-out building 5G and other things will be a challenge, he said.
His comments are noteworthy in light of the statements by merger opponents who don’t want to see Sprint eliminated from the competition because it has been more MVNO-friendly than the other carriers. This past summer, MVNO Ting Mobile said it wasn’t renewing its network service provider agreement with T-Mobile, instead opting for Verizon. A number of factors went into the change, including delays around the merger, but the MVNO said Verizon offers the best coverage and performance and its contract was better than with T-Mobile in terms of rates and other financial terms.
Progress is self-provisioning
About a year ago, Verizon came out with a commercial 5G fixed wireless broadband to the home product, and it was early days—not based on 3GPP standards but on 5G Technical Forum (TF) specifications and it required a white glove installation process.
Since then, Verizon gained experience not in labs but with real people living with the service and that allowed it to understand how to develop its go-to-market strategy and the deployment, he said. A key thing is the balance between indoor and outdoor antenna deployment and the proportion of indoor antennas that can be self-activated rather than requiring a truck roll.
Verizon is now at a point where almost 80% of the antennas are indoor rather than outdoor, and that’s critical in the ability to self-provision, which correlates to costs. It’s built and designed the whole user experience for the self-activation at home, “so we’re now ready to go mass market,” he said, adding there are two critical enablers for that: New Radio (NR) equipment that’s coming; it’s now in some friendly homes with NR equipment in some early markets. At the back end of this year, there will be a full commercial launch.
The other critical thing to broaden the addressable market is the availability of high power CPE; the early NR CPE are using a cell phone-based chipset whereas normally, a CPE would have higher power output. That higher power requires the next iteration chipset, which will be available the first half of 2020.