Verizon management is upbeat about the company’s 5G trials and the fact that the performance of equipment in the millimeter wave spectrum continues to improve.
That’s the consensus by analysts who attended a biannual analyst update meeting this week with Verizon’s management. The operator continues on track to launch fixed 5G in Sacramento and Los Angeles this year, with two other markets not yet named.
A lot of industry veterans initially were skeptical about how millimeter wave spectrum would perform, especially for mobility, but data from Verizon's 11 trial markets shows the spectrum is more resilient than anticipated, with near 1 Gbps speeds at distances as much as 3,000 feet away from the radio node. Verizon released a video showing how it’s getting decent speeds even when there’s foliage or walls in between the radio node and the device.
The company did not update its target of 30 million households for its fixed wireless access technology, Barclays analysts noted, but management acknowledged that better-than-expected propagation could shift the calculus of how large its addressable market could be over time.
Management also retained expectations that capex will remain steady for the foreseeable future, largely achieved by capitalizing on the densification efforts and streamlining its core network to facilitate a more efficient expansion of its LTE capacity and rollout of 5G services, Barclays said.
Oppenheimer analysts said Verizon was more upbeat about SDN/NFV than they have been in the past. They were also upbeat about mobile 5G and expect handsets to be in force by the fourth quarter of 2019, which will reduce traffic on the 4G network.
While fixed wireless access is the first 5G deployment focus for Verizon, its executives over the past several months have pointed out that it’s not the only focus for 5G. Mobility is in the cards, as well as smart cities, IoT and industrial automation.
In the video, which includes shots of Ericsson and Samsung gear, Verizon says it will use 28 GHz and 39 GHz spectrum bands for 5G. Samsung has been identified as the vendor in the Sacramento market, but Verizon did not name the vendor for the LA market.
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The analysts’ reports are in line with what Verizon executives have been saying publicly about their experiences with millimeter wave spectrum and its 5G plans. Verizon CEO Lowell McAdam reiterated to CNBC last week that the carrier is very pleased with the results of millimeter wave tests. bands. He said Verizon "busted the myths" around millimeter wave, proving that transmissions in these higher bands can pass through foliage and do not require line of sight. He said the deployments Verizon is planning for this year will place transmitters and receivers 2,000 feet apart.
Verizon in the video said that it’s currently using only half the spectrum in its portfolio.
Wells Fargo Securities analysts believe Verizon has a firm plan in place to be a leader in provisioning 5G, with an industry-leading millimeter wave spectrum portfolio that has thus far exceeded its own expectations in field trials. “The emergence of 5G will open up growth adjacencies, including monetizing digital content through its Oath platform and opening up distribution opportunities with third-party content/video providers,” the Wells Fargo analysts said.