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.