Verizon’s Earnings Beat; CEO:”We are leading the world in development of new technologies”
Verizon (VZ) posted earnings per share of $1.22, up from $1.17 per adjusted share in the comparable year-ago quarter. Revenues were $32.1 billion, versus $31.8 billion in the first quarter of 2018. Analysts in a Bloomberg consensus forecast expected the company to post earnings per share of $1.17 on revenues of $32.15 billion. Hence, the company beat earnings forecasts.
The company added 61,000 retail net postpaid additions, a key metric of how many users lock in a contract, which included 174,000 postpaid smartphone net additions. Verizon’s service revenues rose 4.4% during the first 3 months of 2019, helped in part by customers added higher-priced plans and new connections, the company said. Separately, Verizon added a net of 52,000 Fios Internet connections, but lost a net 53,000 Fios Video connections.
Verizon, which has begun its mobile 5G rollout in Chicago and Minneapolis (the only supported device is the Motorola Z3 with the 5G Moto Mod), said that its 5G mobile network buildout was part of its $4.3 billion in capital expenditures.
“2019 is shaping up to be an exciting year for Verizon,” said chairman and CEO Hans Vestberg in a statement. “We are leading the world in the development of new technologies with the launch of our 5G Ultra Wideband network. Our ambition remains unchanged to provide the most advanced next-generation networks in the world.”
What’s really interesting, is that as far as we know, Verizon doesn’t even participate in ITU-R WP 5D meetings. That is where IMT 2020 (5G radio aspects) is being standardized, with 3GPP contributing the input documents supported by most ITU-R delegates. An AT&T rep chairs that committee and another AT&T rep chairs the sub working group on IMT frequency aspects. Yet both companies falsely claim they’ve deployed “standards based” mobile 5G despite the FACT that the IMT 2020 Radio Interface Technology (RIT) won’t be selected by the evaluation groups till the fall of 2020.
Sprint, T-Mobile USA, and Dish are the other U.S. network operators that regularly attend ITU-R WP 5D meetings. Qualcomm, Apple, Intel and a few other U.S. member companies also attend those meetings.
So we wonder if Ericsson ONLY gets their IMT 2020 information from their network equipment vendors rather than obtain it directly by attending ITU meetings?
Update on April 25. 2019:
U.S. cities with Verizon 5G Ultra Wideband
U.S. cities that will get Verizon 5G Ultra Wideband in 2019
- Des Moines
- Kansas City
- Little Rock
- San Diego
- Salt Lake City
- Washington D.C.
Verizon wants its mobile 5G to offer impeccable speeds with low latency. To meet those demands, Verizon will initially deploy its 5G Ultra Wideband network on millimeter wave spectrum (mmWave). While mmWave will undoubtedly offer the fastest 5G experience, it has its flaws.
One of the notable challenges with the implementation of new “small cell” towers is the fact that they require local government approval — essentially meaning that carriers need approval in every city they want to install these new towers. To attempt to speed that up, Verizon is encouraging customers to lobby their elected officials. The new “Let’s 5G” website is aimed at both informing people about 5G and what it could offer, and informing users on how they can speed up the process of 5G deployment.
Verizon will initially roll out its 5G service on 28 GHz spectrum. One of the challenges with using the high-band spectrum is that it does not easily cover a large area, and penetration is a serious challenge. Over the next several years, Verizon will build out its 5G network around the country using small cells, and will eventually deploy service on a mid- and low-band spectrum.
In a real-world demonstration of the network at CES 2019, CEO Hans Vestburg showed speeds of 900 Mbps, as well as a crystal-clear video conference with the first fixed-wireless customer in Texas.
For the next several years Verizon’s 5G service will piggyback off its massive 5G network. Expect to see 5G service in larger cities and busy places like airports and stadiums, but you will be unlikely to see the service in the suburbs and rural areas for years to come.
5 thoughts on “Verizon’s Earnings Beat; CEO:”We are leading the world in development of new technologies””
Verizon CEO Hans Vestberg:
We launched our first two cities Chicago and Minneapolis and continue to deploy infrastructure in more cities, prioritizing cities that have made it easy to build there. Our initial launches are performing as expected on a brand new technology being deployed for the first time in the world.
As more features within a network enhances become available for deployment through ongoing software innovation, we will provide increased coverage, improved capacity and greater throughputs.
For our 5G Home product, we’re on track to launch additional markets when new customer equipment under the global standards becomes available in the second half of the year. These enable us to apply our learning’s from the initial commercial launch in 2018 to a broader base of customers.
I’m super proud of what Verizon team has achieved so far and I’m pushing our teams for many more milestones and industry first that will give our customers the best experience.
5G has been a huge focus for us, but it hasn’t taken away from our ability to enhance and improve the best in class 4G LTE network and superior customer experience. The network team continues to deploy leading technologies that improve our customer’s experience.
We have 4G LTE Advanced capability in over 1500 markets across the U.S. and continue to be recognized by third parties for our superior network performance. Our One Fiber deployment is rapidly expanding the multipurpose fiber network outside our landline footprint.
This will enable new revenue opportunities in the large enterprise, small businesses, public sector and the wholesale businesses, while also delivering expense reductions opportunities.
We have ramped up installations to a run rate over 1,000 route miles per month, which puts us at the top of all major U.S. fiber providers. All of this is being accomplished within the current levels of our CapEx guidance.
We are now two years into the implementation of our next generation Intelligent Edge Network, which we expect to be launched and completed by 2021. We’re realizing significant deficiencies and cost savings from our network transformation initiatives and expect the CapEx and OpEx benefits to extend well beyond their investment target.
With our unique set of assets including our wide portfolio of spectrum, dense fiber network architecture and software defined network capabilities; Verizon remains the clear network performance leader in today’s marketplace, and we’re best positioned to capitalize on all the opportunities that 5G will bring to bear.
Our ambition remains to provide the most advanced next generation network performance in the world. As I have said many times before, the combination of our Intelligent Edge Network and the 5G technology capabilities will deliver eight network currencies to our customers and open up a new world of innovation that will transform the way we work, live and play.
We’re leading in the world in 5G, extending our leadership position in 4G, executing on the fundamentals and creating new ways to leverage our vast distribution capabilities through our network as a service strategy and focus our partnership and key elements in driving increased value for our customers.
Therefore, we are excited to announce we partnered with Google to offer YouTube TV to our customers wherever they want it and on whatever platform they choose. Our new partnership allows our widest mobility customers to take their YouTube TV with them on-the-go.
Our wireless 5G Home customers to add premium content from YouTube TV to their Internet bundle and gives our consumer Fios broadband customers even more options when it comes to content and services.
CFO Matt Ellis:
Total operating revenues for the wireline segment decreased 3.9% in the quarter as the business continues to face secular pressures. Growth in high quality fiber products was more than offset by pricing pressures on legacy products and technology shifts.
Consumer Markets revenue increased 0.1% driven by the growth in Fios services. Consumer Fios revenue increased by 2.9% due primarily to demand for our broadband offerings.Fios Internet net adds of 52,000 were driven by continued demand for our high-quality fiber broadband product. Fios Video losses of 53,000 resulting from continued cord-cutting trends as more customers are choosing over-the-top video services.
Our enterprise solutions, partner solutions and business markets revenues declined by 4.5%, 12.5% and 4.9% respectively, driven by technology shifts and pricing pressures as mentioned earlier.
Capital spending for the first quarter was $4.3 billion, which was down approximately $300 million. Our capital expenditures continue to support the growth in data room video traffic on our industry leading 4G LTE network.
The launch in continued build out of our 5G ultra wideband network, the upgrade to our Intelligent Edge Network and significant fiber deployment in 60-plus markets outside our ILEC footprint.
We maintain our full year 2019 CapEx guidance range of $17.0 billion to $18.0 billion. The net result of cash flow from operations and capital spending is free cash flow for the first quarter of $2.8 billion, up about $700 million.
WSJ (on-line sub required): Verizon Pauses Plans to Charge for 5G
Carrier said earlier it would impose $10 monthly fee after three months; service had drawn mixed reviews
Verizon is holding off for now on its plans to charge an extra $10 a month for faster 5G smartphone service.
The largest U.S. wireless carrier by subscribers said Thursday it would waive that charge for an undetermined period for users of the new 5G-compatible Samsung smartphone in markets where the service would launch next, as well as in cities where rollouts have begun.
Verizon turned on 5G service earlier this month in parts of Chicago and Minneapolis, saying at the time that it would waive the $10 monthly fee for just three months. Analysts have since given mixed reviews of the service—which is available to users of the top two tiers of Verizon’s unlimited-data plans—for being limited in scope.
“This is some of the blowback you get from being first” in offering smartphone 5G service, said John Hodulik, an analyst at UBS Group AG. “It didn’t make sense to charge people extra money for a service that they’re rarely going to use.”
Verizon said Thursday it would roll out 5G service in parts of 20 additional cities including Phoenix, Detroit and Providence, R.I., by the end of the year. It didn’t specify when.
A spokeswoman said customers in Chicago and Minneapolis with the first 5G phone Verizon sold, the Motorola Moto Z3 with a clip-on modem that makes it compatible, will begin paying for the service three months after their go-live date. Customers with that phone in the new cities will only receive three months of service free, while Samsung phone users in all 22 of the markets Verizon has announced so far will have the fee waived for an unspecified amount of time.
Tami Erwin, head of Verizon’s new business-focused unit, said the carrier is waiving the cost in all the cities it has announced so far for an undetermined period to give customers time to experience and understand 5G.
The carrier learned from the first two markets that “customers want more of it, and they want it everywhere,” she added. Verizon is working with municipalities to get the remaining zoning permissions it needs to add small cells and densify coverage in the inaugural cities, Ms. Erwin said.
U.S. carriers are jostling to deliver 5G wireless in many markets this year and have sparred over the faster service’s branding. Upgrading networks is a capital-intensive undertaking that requires spectrum and investments in fiber, radios and antennas.
“We are a long way from realizing all the dreams of 5G, but we have to start somewhere,” John Saw, chief technology officer at Sprint Corp., said at an industry conference in Brooklyn on Wednesday. The technology promises to disrupt industries like health care in the same way 4G connectivity helped Uber transform transportation, he said.
Sprint plans to roll out the service in nine cities by the end of the second quarter, Mr. Saw said, adding that the carrier has installed antennas to facilitate 5G in those places but is awaiting the necessary software.“It has been difficult to get to where we are today,” Mr. Saw said.
AT&T executives told analysts on an earnings call Wednesday that its 5G service was available in parts of 19 cities and that it would offer nationwide 5G coverage in 2020. It plans to add three new 5G markets soon.
Some AT&T customers have begun seeing 5GE symbols on their smartphones to indicate that they are receiving higher-bandwidth service, a precursor to the carrier’s rollout of faster technology that meets 5G standards.
“It’s having exactly the effect that you want it to have. Our customers see this tag and they go and do a speed check,” Randall Stephenson, the carrier’s chief executive, said on an analyst call. He added that in the next two or three years wireless customers could begin to pay a premium for the faster speeds.
Neville Ray, chief technology officer at T-Mobile US Inc. criticized rivals’ limited 5G launches in a blog post this week, saying that the carrier would launch its version of the service “when the technology is ready for everyday customer use.” A spokesman said the carrier would offer nationwide 5G service in 2020.
Write to Sarah Krouse at [email protected]
Verizon CEO says 5G launch ‘meets our expectation’ despite early criticism
Gains in new cellular subscribers and service revenue at Verizon Wireless overshadowed losses in cable customers and desktop advertising in the first quarter, leading to better-than-expected earnings at the telecommunications giant.
The discrepancy highlights the focus for the New York City-based company on launching a national fifth-generation wireless network, which promises ultra-fast speeds with lower latency than the prior 4G LTE network.
Verizon previously initiated 5G service in Chicago and Minneapolis Opens a New Window. , though some initial reviews indicated difficulty in achieving the promised speeds. In response to the criticism, CEO Hans Vestberg said the results “meets our expectations.”
“We see of course an opportunity when you are early in the customer experience like 5G you have a chance…to grow with subscribers,” he told investors. “We have much more to come out.” The company plans to launch mobile 5G in 30 cities by the end of 2019.
Verizon Communications Inc. VZ recently launched its fifth 5G-enabled device — Inseego Corp.’s MiFi M1000. Markedly, the Inseego MiFi is Verizon’s first business-ready 5G device that combines bandwidth and speed to meet customers’ expectations, with enterprise-grade security for businesses.
Furthermore, the telecom and media giant launched 5G Ultra Wideband mobility service in Saint Paul, MN. The latest addition joins Denver, Chicago, Minneapolis and Providence (in select locations) as the fifth of more than 30 Verizon 5G mobility cities that the company plans to launch in 2019. (Read more: Verizon Launches Inseego 5G MiFi, Service Reaches St. Paul)
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