Verizon CFO talks up fixed wireless, C-band, mmWave, infra bill; Says no to cloud based 5G core

Speaking at an Oppenheimer investor conference, Verizon’s CFO Matt Ellis said the telco is very optimistic about its fixed wireless business (that despite its FTTH leadership position with FiOS):

Yes, I’m very excited about it (fixed wireless). I think it continues to be a very significant opportunity for us as we think about the next few years ahead of us. We’ve talked about how great the LTE network is and it’s been obviously a very, very huge part of our success. But when you bring the bandwidth that comes in 5G, it really opens up the opportunity, not just do mobility wirelessly but also to do home broadband wirelessly as well. So as I think about fixed wireless in kind of 3 different buckets, the first is our millimeter-wave bucket and our 5G home internet. That’s now in almost 50 markets across the country, continuing to expand the number of open for sale as we build out the millimeter-wave network. The second piece that’s in market today is our 4G Home, which we launched late last year. It’s now available in over 200 markets in every — in parts of all 50 states. So we recently doubled the amount of the size of the footprint that our 4G Home is available. And then it comes back to my comment on to the previous questions around monetizing the network that we’ve built and where we have the capacity in addition to our Mobility customers to offer the LTE Home product. We’re doing that. We’re seeing good take rates on that. Customers are seeing great performance on it.

And then last month, we upgraded the hardware, you think the router that customers get. So it doesn’t just support LTE Home, it’s also got C-band in it. So as soon as we turn the C-band network on, that customer can upgrade to 5G Home on C-band without having to change out hardware. So we’re excited that we’re starting to populate the base of LTE Home customers with customers that already have a C-band-ready device and C-band being the third one of the levers here within fixed wireless access. So excited about the opportunity that will kick in when we turn C-band on later this year. But fixed wireless access gives us the opportunity to monetize the network in a way that we haven’t previously been able to, where we can offer not just mobility solutions for our consumers but also home broadband and also for businesses as well. We talk about fixed — LTE Home, but we also have the similar product in 5G Home for business as well. You think 5G office the same way. So it gives us the opportunity to take that network that you built out mobility and yet monetize it with another use case. We’re just scratching the surface here, and I think the next few years are going to be very exciting for us on fixed wireless access.

Ellis also commented about the $1T U.S. infrastructure bill that passed the Senate today (August 10th).  He said it takes a technology-neutral approach to broadband funding which would allow Verizon to deploy a mix of fiber and fixed wireless access.

I think one of the important things in the way that the bill has been crafted at this point in time is that it doesn’t favor any particular technology. It’s more based off of outcomes. And so there’s areas where it could make sense to build more broadband. There’s areas where it makes sense to provide a better experience to customers through building out fixed wireless faster than otherwise may happen. So we think it’s a good approach that’s in the bill today. Obviously, it’s got to get all the way through the legislative process. But certainly, the requirement that we continue to build out high-quality broadband throughout the country is something that the bill is focused on, is something that we’re very supportive of. And now we’re looking at geography by geography, where do we think it would make the most sense to either deploy fiber or to deploy fixed wireless as a solution to bring that to the faster broadband to consumers and businesses.

Asked how C-band and mmWave deployments are performing versus your expectations, Matt replied:

For mmWave, we’ve been deploying it for a couple of years now. And we set a target this year to do another 14,000 sites. We’re ahead of pace on that already and that’s by design. We wanted to be ahead of pace in the first half of the year on millimeter-wave, so that when the C-band started picking up in the second half of the year, we had the capacity to do that as well. But the millimeter wave equipment is up and running, has been for a couple of years and is working very well.

On the C-band side, we said we’d have 7,000 to 8,000 sites up by the end of the year or when we launch in December, the expected launch date. But the vast majority of those radios, we already have in our warehouses. The rest of them, purchase orders are out there for the vast majority that we haven’t already received. So I know there’s been a fair amount of concern about the supply chain, just given what we’re seeing not just in our sector but across all sectors with chipsets. I can tell you that in terms of building out the radios for the C-band, those are in good shape.

And we’ve started to test those and we’ve got the first few sites up. Obviously, we can’t turn those on yet because we don’t have the licenses approved from the FCC until we get to the clearing date. But with the early testing we’ve been doing, we’re seeing the equipment perform as we would expect it to, which really isn’t a surprise. This is one of the things that made C-band such an attractive spectrum for us because it’s a global 5G band. And so our partners at Samsung and Nokia and Ericsson aren’t just building C-band equipment for the U.S. market. And so they’ve got the scale there to really have high-performing equipment available. So the supply chain ecosystem is bringing the radio equipment to market as we expected it to.

Noting that some competing telcos (especially AT&T) are looking to take advantage of cloud-based technologies to lower network costs, operating costs, the Oppenheimer moderator asked if Verizon was looking at doing the same? “Or what are you doing on that front?”

Absolutely, we’ve been deploying cloud technologies for the last few years now, both within the network and also within the core operations of the business. It brings significant efficiencies in the right place. We went through an interesting transition from cloud from the standpoint of initially being skeptical about it. Kind of how comfortable am I moving these applications and so on into the cloud?

Then you get comfortable with it and you say, okay, we’re going to move everything. And then if you look at it further, you think about there are some things that some should move and there’s some things that shouldn’t.

And so the team has done a really good job over the past few years of identifying where it makes sense for things to move (to the cloud), and we’ve got that underway. Some things have transitioned already. Other things are still in the process of transitioning.

And then there are some pieces where we don’t think it makes sense, because of the scale we have and so on, and there are certain pieces like the network core [1.], for example, is something that we have our own cloud product that we’re deploying there that we think that’s part of what makes Verizon.

So it’s an application-by-application analysis. That analysis is largely done. Where it makes sense to do to transition to public cloud, we have. Where it doesn’t, we won’t. But it really comes down to finding the most efficient and effective ways of running all parts of the business.

Note 1.  Cloud Native 5G Core Network:

The 3GPP System architecture for the 5G System (5GS); Stage 2 [3GPP TS 23.501] specifies a Service Based Architecture (SBA), where the control plane functionality and common data repositories of a 5G network are delivered by way of a set of interconnected Network Functions (NFs), each with authorization to access each other’s services.  “Network functions within the 5GC Control Plane shall only use service-based interfaces for their interactions.”

The latest 3GPP TS 23.501 V17.1.1 spec is dated June 24, 2021, so its a work in progress for 3GPP Release 17 (not yet approved).

Although the 5G Core (5GC) implementation is the choice of the network operator, in practice, the expectation is that 5GC will be deployed on software-defined infrastructure which implies a “cloud-native” deployment. In broad terms, this means 5GC implementations that use microservices, containers, centralized orchestration, CI/CD, open APIs, service meshes, and more such new cloud software jargon.

Network Functions are self-contained, independent and reusable. Each Network Function service exposes its functionality through a Service Based Interface (SBI), which employs a well-defined REST interface using HTTP/2.

ETSI (3GPP’s host and secretariat) is transposing their 5G specifications which then become ETSI standards. There is no equivalent work being done in ITU-T.

……………………………………………………………………………

References:

https://www.verizon.com/about/investors/oppenheimer-24th-annual-technology-internet-communications-conference

https://www.3gpp.org/ftp/Specs/archive/23_series/23.501/

3 thoughts on “Verizon CFO talks up fixed wireless, C-band, mmWave, infra bill; Says no to cloud based 5G core

  1. Verizon will rapidly integrate C-band spectrum with mmWave for customers

    “The depth of our spectrum portfolio, now the strongest in the industry, allows us to quickly expand access to a world-class 5G experience for our mobile and fixed broadband customers, providing high speeds, low latencies and enormous capacity,” said Adam Koeppe, Senior Vice President of Technology Planning at Verizon. “These lab trials demonstrate the exceptional network performance our customers will receive as we are able to integrate our newly acquired C-band spectrum with mmWave spectrum.”

    In the first quarter of 2022, Verizon expects to put into service the new 5G C-band spectrum in the initial 46 markets and to provide 5G Ultra Wideband service to 100 million people. Over 2022 and 2023, coverage is expected to increase to more than 175 million people and by 2024 and beyond, when the remaining C-band spectrum is cleared, more than 250 million people are expected to have access to Verizon’s 5G Ultra Wideband service on C-band spectrum.

    https://www.verizon.com/about/news/verizon-c-band-spectrum-mmwave

  2. Verizon this week announced it expanded its 5G Home fixed wireless Internet service to five new cities: Austin, Texas; Gresham, Oregon; Albuquerque, New Mexico; Little Rock, Arkansas; and Nashville, Tennessee. With this latest expansion, the carrier said it’s now offering 5G Home services in 52 cities.

    “We’re continuing our aggressive expansion of our 5G Ultra Wideband and 5G Home services. Customers in these six cities join a growing list who can now take advantage of game-changing technology that will power the future of wireless and home broadband applications and solutions,” said Kyle Malady, Verizon’s chief technology officer, in a press release.
    https://www.verizon.com/about/news/verizon-5g-home-broadband-mobility-offerings

  3. Light Reading: Verizon takes cautious cloud approach

    Ed Chan, Verizon’s chief network engineering officer, told the financial analysts at Cowen that the operator has no immediate plans to shift its core network operations into the cloud like AT&T and Dish Network plan to do.

    However, he said Verizon will continue to look for ways to team with cloud computing providers. For example, Verizon has extensive deals with Amazon and Microsoft for edge computing – but those agreements don’t cover Verizon’s core network operations.

    Chan’s comments on the cloud are noteworthy considering Verizon is spending an extra $10 billion over the next three years to upgrade its 5G network with C-band spectrum. And that spending is in addition to the roughly $50 billion Verizon paid for C-band spectrum licenses.

    Chan made his comments to the Cowen analysts as part of the firm’s 7th Annual Cowen Communications Infrastructure Summit. In their summary of Chan’s comments about the cloud, the analysts wrote that he “sees some benefits but it has its limits and does not seem likely to follow” AT&T and Dish.

    “While the idea is to get control and flexibility in managing the network (AT&T migrating its core functions, likely subscriber management and the ability to network slice), much of the core network is COTS (commercial off-the-shelf) equipment, and the core is tightly tied to OSS/BSS (care/billing) systems, thus Verizon believes it would be difficult to migrate to a cloud platform,” the analysts wrote of Chan’s comments on the matter.

    Dish unveiled a massive new agreement with Amazon Web Services (AWS) earlier this year that essentially paves the way for the operator to run its network operations inside AWS’ public cloud. The deal has been heralded as a seminal event in the global wireless industry, given networking trends toward cloud, virtualization and software-defined operations.

    Indeed, just week’s after Dish’s deal with AWS, AT&T announced it would offload its core cloud networking operations to Microsoft. The deal essentially allows AT&T to run its core 5G network inside Microsoft’s Azure cloud.

    But according to Chan’s comments to the Cowen analysts, Verizon has no concrete plans to follow suit. He told the analysts that the bulk of Verizon’s 5G spending today is focused on its access network, primarily installing C-band-capable radios atop cell towers around the country. He said that spending is split roughly evenly between the hardware and the construction costs.

    However, Verizon remains open to working with cloud computing companies in other areas. Indeed, Verizon has inked extensive agreements with both AWS and Microsoft for public and private edge computing services.

    “Verizon does see working with cloud operators, especially on the edge (Verizon provides the access, the cloud provides the platform for developers), potentially expanding its own relationship with AWS, and is more about the relationship/arrangement between two big companies rather than the technology integration,” the Cowen analysts summarized.

    https://www.lightreading.com/the-core/verizon-takes-cautious-cloud-approach/d/d-id/771508?

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