Verizon earnings beat estimates despite COVID-19 impact; wireless revenues down; 2H-2020 Priorities

Verizon’s reported today that 2nd-quarter adjusted earnings per share was $1.18, ahead of analysts’ consensus estimate of $1.15, but down from $1.23 in the same period last year.  The company estimates that second-quarter 2020 EPS and adjusted EPS included approximately 14 cents of COVID-19-related net impacts, primarily driven by impacts to wireless service revenue and lower advertising and search revenue from Verizon Media.

Verizon added 173,000 wireless postpaid phone subscribers for the second quarter, as the COVID-19 pandemic weighed on wireless service and equipment revenue (see CFO Matt Ellis quote below).

Total wireless service revenue was down 1.7% from the same period a year ago, to $15.9 billion, while postpaid phone churn for Q2 was 0.51%. Verizon cited a significant drop in wireless equipment revenue because of low activations as the main driver behind a 4% drop in total consumer revenues to $21.1 billion and business to $7.5 billion.

Consumer wireless service revenue declined 2.7% from the year ago period to $13.1 billion. Business wireless revenue declined 3.7% YoY to $7.5 billion (see charts below).

Like AT&T, which reported earnings yesterday, Verizon said the results include impacts from reduced roaming and usage as travel remains restricted, and waived fees. However, Verizon said it had record uptake of its premium Unlimited plans by new accounts. Wireless postpaid average service revenue per account (ARPA) declined 1.8% to $116.02.

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Verizon continues to build-out its 5G network, with $9.9 billion in capital expenditures in the first half of the year. Those investments supported capacity and traffic growth across Verizon’s networks and included additional fiber and cell sites to expand its 5G UltraWideband rollout, which primarily uses 28 GHz millimeter wave spectrum. Verizon 5G network is in parts of 35 cities, while its fixed wireless 5G Home product is currently in six markets.

“Through extraordinary circumstances, Verizon delivered a strong operational performance in the second quarter,” said Verizon CEO Hans Vestberg in a statement. “We remain focused on our strategic direction as a technology leader, quickly adapting to the new environment and providing our customers with reliable and vital connections and technology services, while working to keep our employees safe and accelerating our 5G network deployment. We have embraced, engaged in and responded to important social movements happening throughout the world, and will continue to be at the forefront of initiatives that move the world forward for everyone. We are proud of what we have done, and continue to do, for our customers, shareholders, employees, and society.”

Other Q2 metrics for Verizon:

  • Total revenue of $30.4 billion, down 5.1%
  • Adjusted EBITDA of $11.5 billion and adjusted EBITDA margin of 37.9%
  • Earnings per share of $1.18, down 4.1%
  • Verizon Media revenues were down 24.5% to $1.4 billion

Commenting on the impact of COVID-19, Verizon Chief Financial Officer Matt Ellis told Barron’s Friday morning:

“Certainly this was a very different quarter than others, not part of our plan for the year, but when you look at the results I think you see strong operational performance and very good cash flow coming from that. I think it speaks to the nature of our business model and the importance of our products in our customers’ lives.”

Guidance and 2nd Half 2020 Priorities:

Verizon expects wireless revenue in a range of -1% to flat year over year in the 3rd quarter.  Capital spending is forecast to be in the range of $17.5 billion to $18.5 billion.

Stated 2nd half 2020 initiatives are:

  • 5G adoption
  • Network monetization
  • Next-gen B2B applications
  • Customer differentiation
  • New revenue opportunities

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“Regardless of how results match up against expectations for Verizon, these results should be seen as good compared to what AT&T reported yesterday,” wrote New Street Research analyst Jonathan Chaplin on Friday morning. This author certainly agrees, as Verizon is not encumbered by DirecTV and Warner Media as AT&T is.

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Quotes & Answers to Questions from Verizon’s July 24th Earnings Call Transcript:
CEO Hans Vestberg:

In February, we made some bold statements about our deployment on 5G in 2020 all the way from the Mobile Edge Compute, 5G Home cities, 5x more small cells on 5G and some 60 cities on the 5G Ultra-Wideband as well as a nationwide coverage on 5G with DSS. I’m happy to report we’re on track on that, and in some cases even ahead of the plan. We are continuing to deploy our technology.

Our test with DSS is going very well and as well, we have launched some of the 60 markets when it comes to mobility and some additional markets on 5G Home. However, you’re going to see that in the second half of this year we have a lot of new things happening and building on the foundation of the strategy and the strategic priorities that Verizon has outlined the last couple of years.

For Verizon Business Group, 5G Mobile Edge Compute, an important piece of our growth strategy, we have said that we are going to have 10 5G Mobile Edge Compute sites this year deployed. And now we’ve also started gearing up our partners. We have announced IBM and we also talked about SAP as two very important application providers that are going to take part of our deployment and that we’re collaborating with right now. So we’re creating a lot of excitement around the 5G Mobile Edge Compute and a lot more to come in the second half. Verizon Business Group, 5G Mobile Edge Compute, an important piece of our growth strategy, we have said that we are going to have 10 5G Mobile Edge Compute sites this year deployed. And now we’ve also started gearing up our partners. We have announced IBM and we also talked about SAP as two very important application providers that are going to take part of our deployment and that we’re collaborating with right now. So we’re creating a lot of excitement around the 5G Mobile Edge Compute and a lot more to come in the second half.

We are on plan to deploy more than 5x more millimeter wave base stations this year compared to last year, so the footprint will be much broader and we will be into 60 cities and those cities will be much more covered than they were last year. And we are disclosing that – usually on a fairly frequent basis how that map is growing. As you have seen, we have launched fairly few markets the first half when it comes to the 60, so you should expect quite a lot of noise from us in the second half and we’re really excited about that. But you also need to think about our model will also include nationwide, so think about our model being a millimeter wave that is transformative. No one is even close to it in the world. Then we will have national coverage on top of that. And then in the bottom, we have the best 4G network in the world. And then I don’t think that our customer will be disappointed with that. We build things that are transformative that are so different than others. So I would be excited for the second half if I would be you. It’s crunch time for Verizon. We have been talking about this for one and a half year. I think our customers will be very excited in the second half.

One year ago, we didn’t talk about DSS. But of course, our team was working to prepare all the networks so we can actually deploy DSS in all the radio base stations we have. So we constantly are ahead of the game thinking what is needed to be preparing for the network. But right now our focus is very much about the commitments we have to our customers when it comes to 5G, but also to keeping the best network on 4G. That’s where we’ll have it and then do that fiber reach. Those are the priorities and it will continue so. Then any speculation on the future spectrum or something, that’s a little bit early to have right now. But I can tell you my team is always proactively thinking about how to do this network continue to be the best in America. There’s no debate about that. And I have a high confidence that they will continue to do so when it comes to our CapEx allocation as well.

If you think about the Mobile Edge Compute, just last week we announced partnership with IBM and with SAP. That’s going to be part of the 5G Mobile Edge Compute in order to serve our customers. So you’re going to see that how we are doing, sort of laying out early indicators on that path to revenue that we have outlined both internally as well as externally.

5G Mobile Edge Compute. I think that the use cases we see today is very much real-time decision-making. If that’s a big distribution center that’s going to have 5G-enabled distribution center to actually take real-time decisions, or if it’s a big manufacturing plant that’s going to use 5G Mobile Edge Compute by wireless connecting to all the robotics, we’re in many of those cases. And then you also see cases where sort of IoT devices with 5G will actually enable a new way of delivering a service. And finally, the whole VR and AR for large enterprises where you need a low latency on the campus or in the manufacturing or whatever it might be, those are all the early cases. Many of them right now are based on low latency. We see it’s creeping into security because the data can then be contained with the company, meaning they can actually process and have all the processing and storage at the edge, which means they can keep the data for themselves. So those two capabilities are the first one. I think in the next, we’re going to see enormous bandwidth of enterprise that need to send a lot of data to the edge in order to take decisions. But so far, latency and security, that’s how the 5G Mobile Edge Compute scenarios are working out. And we basically have two, three – or two, I would say, per industry vertical that are lead customers for us. And we work with them to do the solutions and sometimes we are the third party as we don’t have all application ourselves. That’s how we’re working it right now and I’m encouraged. And, of course, as I said before, acceleration has been seen, because all the digitalization and touchless that is needed going forward.

We feel really good about our model. As we have said before, minimum of 10 5G Home cities. We’re going to have the cities with a much better chipset. That’s on plan for this second half.

And the self-install, which I have been talking about now for one and half year, which excites me that our customers should be able to receive the gear, the CPs and be able to install themselves in a short timeframe. It’s not that I’m down to the times that I have envisioned. I wanted to be below one hour, but we have come a far way from the eight hours we started with. And compared to a fiber installation where you need to first put it on the agenda, you wait for a couple of weeks and you have to come there and install it, and it takes hours to do. This is a totally different way. It’s transformative. As I said, we are building 5G that’s transformative, not the me-too to my 4G.

I think one thing that we have learned also is that, of course, fixed wireless access, we think a lot about consumers, but there is an opportunity clearly when you see this also as a fixed wireless access opportunity for small and medium business, et cetera, that we will start working on later on.

CFO Matt Ellis:

We’re driving these (5G Home) revenues off of the same (wireless) network that you are getting 5G mobility revenues on. So this is the first time we’ve had that opportunity to drive multiple revenue streams off of the same investment. And so as we roll out the network, we’ll have the opportunity to add more market share. And so we’re very excited about that as we head into ’21 with the progress we’re making this year.

We’re certainly excited about the opportunities that come with the C-band auction. One of the great things about having got the balance sheet in position that we have is it gives us the opportunity to take advantage of items like that when they come along. And I don’t think that – as I look at the balance sheet and I look at the auction that that will provide any inhibitor [ph] to us either in terms of what we do in the auction or how we invest in the rest of the business. In terms of the free cash flow, so the second quarter as you say, a couple of items in there. We had the tax benefit from the item that we recognized in the fourth quarter last year. We also had a timing difference of about $2 billion moving just regular cash payments from second quarter to last week. But all-in-all, look, our cash flow will continue to be strong because we have – obviously we have a strong business with a recurring revenue stream that will continue into the second half of the year. Working capital provided a benefit in the first half with the lower volumes. We’ll see how that plays out in the second half of the year. And I think that will be one of the key determinants of how cash flow looks for the full year on a year-over-year basis. So we’ll see how it plays out, but I certainly expect free cash flow to continue to be strong for the business.

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References:

 

Verizon misleading 5G commercials called out by NAD after AT&T complaint

The National Advertising Division (NAD) has condemned Verizon for misleading consumers over the quality of its 5G network across the country.  NAD recommended Verizon stop using the claim that it’s delivering “the most powerful 5G experience for America” in two previously aired TV commercials touting the carrier’s 5G service rollout in sports stadiums were challenged by 5G competitor AT&T.

Editor’s Note:   NAD is an investigative unit of the advertising industry’s system of self-regulation and is a division of the BBB National Programs’ self-regulatory and dispute resolution programs.

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The National Advertising Division has determined that, in the context of two challenged television commercials touting Verizon’s rollout of 5G service in sports venues, the claim that ‘Verizon is building the most powerful 5G experience for America’ reasonably communicates a message about the consumer experience of using 5G mobile service that was not supported by the evidence in the record,” according to statement from NAD.

The message is apparently that Verizon was not fairly representing its network in advertisements and promotions broadcast at sporting venues.

Verizon plans to appeal the ruling to the National Advertising Review Board.

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Verizon is in hot water over its misleading 5G commercials following AT&T complaint

Verizon is building 5G networks in sporting venues across the U.S., though the NAD believes the way the advertisements have been created suggests a similar experience would be offered outside the sports venues themselves.

The express claim stated in the ads is that “Verizon is building the most powerful 5G experience for America,” a message the carrier indicated is clear to consumers, despite NAD’s finding that Verizon’s use of past and present tense conveys the message that it currently delivers the most powerful 5G experience.

“The intent of the commercial is to inform consumers about the billions of dollars Verizon is investing in its 5G buildout. Verizon strongly believes that consumers understand that this is the only message that is reasonably conveyed,” said Verizon in its advertiser’s statement.

NAD pointed to wording like “This is happening now,” for the NFL spots and said Verizon’s “unqualified superiority claim…goes beyond touting Verizon’s spectrum portfolio.” Instead, sending the message of 5G consumer experiences that include capacity to serve many people at once and using Verizon’s 5G network to post content, along with resilience, coverage and latency –  which NAD said Verizon didn’t provide sufficient evidence to support its present tense “most powerful network” claim.

Based on the context, one commercial the NAD release appears to be referring to is a Verizon NFL 5G Built Right ad, which Jeffrey Moore, principal at Wave7 Research, confirmed ran heavily in September 2019 in line with the start of NFL season and stopped airing November 18.

“5G branding efforts from Verizon, AT&T, and T-Mobile shifted to pandemic-related branding, showing that Verizon, AT&T, and T-Mobile are doing what they can to keep customers connected and safe,” Moore told Fierce Wireless.

Verizon announced last September it was expanding 5G service to 13 NFL stadiums. Given current restrictions on large public gatherings in many places though, it’s unclear when ads depicting massive crowds might come back into favor.

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U.S. based wireless telcos are facing a difficult challenge in delivering the desired “5G experience.” Despite the telcos preaching about the benefits of mmWave spectrum to underpin 5G networks, the telcos are performing woefully according to many critics/pundits.

T-Mobile has been blasted for the speeds which have been delivered over the 600 MHz spectrum it has been offering, while AT&T and Verizon has been failing at coverage. In a recent Rootmetrics gaming study in Los Angeles, none met the minimum requirements for latency.

Moore noted that Metro By T-Mobile’s “Rule Your Day” campaign, was halted for a period, but restarted May 6. On the postpaid side, T-Mobile’s message for a time was “We’re with you,” but has now returned to the tagline of “Are you with us?”

This “slap on the wrist” by NAD implies that the U.S. is failing to even come close to meeting its own inflated promises in the delivery of 5G service.

For an excellent analysis and comparison of exaggerated 5G claims by Verizon vs AT&T, please see this blog post by Adrian Diaconescu.

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References:

https://www.prnewswire.com/news-releases/nad-recommends-verizon-discontinue-the-claim-that-it-is-delivering-the-most-powerful-5g-experience-for-america-in-two-tv-commercials-advertiser-to-appeal-301059468.html

https://telecoms.com/504372/verizon-gets-wrist-slap-for-misleading-5g-claims/

https://www.fiercewireless.com/operators/verizon-should-discontinue-most-powerful-5g-experience-ad-claim-nad-finds

https://www.phonearena.com/news/verizon-misleading-5g-advertisingatt-complaint_id124706

Verizon misleading 5G commercials called out by NAD after AT&T complaint

The National Advertising Division (NAD) has condemned Verizon for misleading consumers over the quality of its 5G network across the country.  NAD recommended Verizon stop using the claim that it’s delivering “the most powerful 5G experience for America” in two previously aired TV commercials touting the carrier’s 5G service rollout in sports stadiums were challenged by 5G competitor AT&T.

Editor’s Note:   NAD is an investigative unit of the advertising industry’s system of self-regulation and is a division of the BBB National Programs’ self-regulatory and dispute resolution programs.

……………………………………………………………………………………………………………………………………………….

The National Advertising Division has determined that, in the context of two challenged television commercials touting Verizon’s rollout of 5G service in sports venues, the claim that ‘Verizon is building the most powerful 5G experience for America’ reasonably communicates a message about the consumer experience of using 5G mobile service that was not supported by the evidence in the record,” according to statement from NAD.

The message is apparently that Verizon was not fairly representing its network in advertisements and promotions broadcast at sporting venues.

Verizon plans to appeal the ruling to the National Advertising Review Board.

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Verizon is in hot water over its misleading 5G commercials following AT&T complaint

Verizon is building 5G networks in sporting venues across the U.S., though the NAD believes the way the advertisements have been created suggests a similar experience would be offered outside the sports venues themselves.

The express claim stated in the ads is that “Verizon is building the most powerful 5G experience for America,” a message the carrier indicated is clear to consumers, despite NAD’s finding that Verizon’s use of past and present tense conveys the message that it currently delivers the most powerful 5G experience.

“The intent of the commercial is to inform consumers about the billions of dollars Verizon is investing in its 5G buildout. Verizon strongly believes that consumers understand that this is the only message that is reasonably conveyed,” said Verizon in its advertiser’s statement.

NAD pointed to wording like “This is happening now,” for the NFL spots and said Verizon’s “unqualified superiority claim…goes beyond touting Verizon’s spectrum portfolio.” Instead, sending the message of 5G consumer experiences that include capacity to serve many people at once and using Verizon’s 5G network to post content, along with resilience, coverage and latency –  which NAD said Verizon didn’t provide sufficient evidence to support its present tense “most powerful network” claim.

Based on the context, one commercial the NAD release appears to be referring to is a Verizon NFL 5G Built Right ad, which Jeffrey Moore, principal at Wave7 Research, confirmed ran heavily in September 2019 in line with the start of NFL season and stopped airing November 18.

“5G branding efforts from Verizon, AT&T, and T-Mobile shifted to pandemic-related branding, showing that Verizon, AT&T, and T-Mobile are doing what they can to keep customers connected and safe,” Moore told Fierce Wireless.

Verizon announced last September it was expanding 5G service to 13 NFL stadiums. Given current restrictions on large public gatherings in many places though, it’s unclear when ads depicting massive crowds might come back into favor.

…………………………………………………………………………………………………………..

U.S. based wireless telcos are facing a difficult challenge in delivering the desired “5G experience.” Despite the telcos preaching about the benefits of mmWave spectrum to underpin 5G networks, the telcos are performing woefully according to many critics/pundits.

T-Mobile has been blasted for the speeds which have been delivered over the 600 MHz spectrum it has been offering, while AT&T and Verizon has been failing at coverage. In a recent Rootmetrics gaming study in Los Angeles, none met the minimum requirements for latency.

Moore noted that Metro By T-Mobile’s “Rule Your Day” campaign, was halted for a period, but restarted May 6. On the postpaid side, T-Mobile’s message for a time was “We’re with you,” but has now returned to the tagline of “Are you with us?”

This “slap on the wrist” by NAD implies that the U.S. is failing to even come close to meeting its own inflated promises in the delivery of 5G service.

For an excellent analysis and comparison of exaggerated 5G claims by Verizon vs AT&T, please see this blog post by Adrian Diaconescu.

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References:

https://www.prnewswire.com/news-releases/nad-recommends-verizon-discontinue-the-claim-that-it-is-delivering-the-most-powerful-5g-experience-for-america-in-two-tv-commercials-advertiser-to-appeal-301059468.html

https://telecoms.com/504372/verizon-gets-wrist-slap-for-misleading-5g-claims/

https://www.fiercewireless.com/operators/verizon-should-discontinue-most-powerful-5g-experience-ad-claim-nad-finds

https://www.phonearena.com/news/verizon-misleading-5g-advertisingatt-complaint_id124706

Verizon Q1 earnings beat; loses postpaid phone & Fios TV subs, adds Fios internet subs; 5G & fiber build-out on track

Verizon reported higher-than-expected adjusted net income in the first quarter of 2020 – a period where the coronavirus pandemic weighed on the carrier’s wireless business.   Verizon was forced to close 70% of its stores because of the stay at home orders. Verizon said its networks performed strongly in the face of increased traffic stemming from the many  shelter in place orders throughout the U.S. (see Network Usage Patterns chart below).
Verizon said it’s experienced a 9% increase in wireless data use as compared to typical network usage, as well as a 38% increase in voice over LTE minutes of use, a 45% increase in VoLTE call times, and a 65% increase in virtual private network usage. Use of collaboration tools is up 10 times its usual traffic volume, and gaming traffic is up more than 200% than typical. Video use is up 41% over baseline.

Verizon had 115.6 million wireless postpaid connections across its business at the end of March, including tablets, smartphones and other gadgets like smartwatches. Verizon’s pay-television service – Fios video – lost 84,000 connections in the quarter and the company added 59,000 Fios internet connections.

Verizon lost 68,000 postpaid phone connections during the first three months of the year, compared with a net loss of 44,000 such connections during the same period a year earlier. Retail store closures led to a “significant drop” in customer activity, the company said.  Postpaid phone customers are considered lucrative because they typically pay bills monthly under longer-term contracts and are less likely to switch carriers. In sharp contrast, AT&T added 163,000 postpaid phone subscribers during the first quarter.

Total revenues for wireless products and services was essentially flat, seeing just a 0.5% decrease year-over-year to $22.6 billion. While wireless service revenue grew in both the consumer and business segments, Verizon said, that growth was countered by sharp reductions in equipment revenue because in-store customer engagement was limited by social distancing measures. Consolidated operating revenues for the company were down 1.6% to $31.6 billion.

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The largest U.S. wireless carrier by subscribers tempered its financial forecasts for the rest of the year, lowering its profit goals (see Matt Ellis’ remarks below) and withdrawing its revenue targets. In the first quarter, the company reported a slight drop in wireless subscribers as gains in business accounts were offset by a steep decline in new consumer accounts.

Verizon increased its bad-debt reserve by $228 million based on the number of customers it expected won’t be able to pay their bills. It and other carriers signed a pledge with the Federal Communications Commission not to cut off service for 60 days or charge late fees to consumers facing pandemic-related hardships.

“We were in a position of not really having any idea what the impact of the social distancing and shelter-in-place would [be],” said Matt Ellis, Verizon’s chief financial officer.  Verizon hasn’t disclosed how many customers have stopped paying, but Mr. Ellis said many consumers continue to pay their wireless bill even when they can’t pay their car loans or mortgages.

Verizon’s Progress towards their 2020 Goals:

Strengthen & Grow Core Business
•Driving digital sales through enhanced experiences
•Strengthened mmWave spectrum holdings through Auction 103

Leverage Assets to Drive New Growth
34 Ultra wideband cities live; 5G network build on plan
•BlueJeans acquisition announced in April expands portfolio

Drive Financial Discipline & Strength in Balance Sheet
•Disciplined spend with focus on operational efficiencies
•Scenario planning to navigate uncertainties

Infuse a Purpose-Driven Culture
•Continuing initiatives to drive meaningful difference to society
•Leading brand perception related to COVID-19 response

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CEO Hans Vestberg (English grammar is not very good and not corrected here) talked up VZ’s 5G and fiber plans on today’s earnings call:

When it comes to leverage our assets and we’re growing in the future our 5G plans and our fiber plans the build out of that are on plan. We were also a little bit ahead of plan when we ended the first quarter. And can I report still today we are on plan with the 5G and fiber. Of course, our challenge is out there when it comes to COVID-19 and so on.

But our team are finding new ways and innovative ways to actually do the deployment. There are ways of dealing with approvals from the municipalities set by new ways. And we have great collaborations from many of the municipalities to do it. There might be problems going forward but I am also confident that my team are very innovative in the field and see that we continue to drive hard on this.The 5G is still very much in the middle the center of our strategy. And as you heard me saying before we’re in the middle of the execution and we’re not halting that. We’re keeping it up all the time and the team is doing great work there. And we see opportunity with 5G going forward both with building all the cities, the 5G mobile edge compute as well as making this nationwide 5G still this year.

On top of that we increased the CapEx guidance in the quarter because we felt that it was a good time for us to continue to see that we have robust networks as we went into a moment in time we don’t really know how the network would be used. At the same time of course sending a message that we think is a good return on investment on that incremental CapEx.

Editor’s Note:  We find it beyond unbelievable that Verizon is such a 5G cheerleader, especially CEO Hans Vestberg, when the company is not even a member of 3GPP and doesn’t attend 3GPP (5G architecture and 5G core) or ITU-R WP5D meetings where IMT 2020 radio aspects (RIT/SRIT) are being standardized.  Yet their U.S. network provider competitors are all 3GPP members and attend 3GPP as well as ITU meetings.  The competitor list includes AT&T, T-Mobile, Dish, Comcast, Charter, C-Spire, and other network service providers.

Verizon CFO Matt Ellis said:

For adjusted EPS, we are revising our original guidance of 2% to 4% growth and are now guiding to a range of negative 2% to positive 2% change from the prior year. Our new estimated range is based on a scenario that assumes significant headwinds prevail throughout the second quarter.

We have limited visibility into the second half of the year, which will depend on various potential operating environments. We will continue to assess the impact of COVID on our business, including our bad debt reserve and expect to provide an update on our next earnings call based on how things develop between now and then.

You can watch Verizon’s earnings call webcast here.

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References:

https://www.verizon.com/about/investors/quarterly-reports/1q-2020-earnings-conference-call-webcast

https://seekingalpha.com/article/4339873-verizon-communications-inc-vz-ceo-hans-vestberg-on-q1-2020-results-earnings-call-transcript

https://www.wsj.com/articles/verizons-wireless-business-slowed-by-coronavirus-11587730044

Verizon Q1 earnings beat; loses postpaid phone & Fios TV subs, adds Fios internet subs; 5G & fiber build-out on track

Verizon reported higher-than-expected adjusted net income in the first quarter of 2020 – a period where the coronavirus pandemic weighed on the carrier’s wireless business.   Verizon was forced to close 70% of its stores because of the stay at home orders. Verizon said its networks performed strongly in the face of increased traffic stemming from the many  shelter in place orders throughout the U.S. (see Network Usage Patterns chart below).
Verizon said it’s experienced a 9% increase in wireless data use as compared to typical network usage, as well as a 38% increase in voice over LTE minutes of use, a 45% increase in VoLTE call times, and a 65% increase in virtual private network usage. Use of collaboration tools is up 10 times its usual traffic volume, and gaming traffic is up more than 200% than typical. Video use is up 41% over baseline.

Verizon had 115.6 million wireless postpaid connections across its business at the end of March, including tablets, smartphones and other gadgets like smartwatches. Verizon’s pay-television service – Fios video – lost 84,000 connections in the quarter and the company added 59,000 Fios internet connections.

Verizon lost 68,000 postpaid phone connections during the first three months of the year, compared with a net loss of 44,000 such connections during the same period a year earlier. Retail store closures led to a “significant drop” in customer activity, the company said.  Postpaid phone customers are considered lucrative because they typically pay bills monthly under longer-term contracts and are less likely to switch carriers. In sharp contrast, AT&T added 163,000 postpaid phone subscribers during the first quarter.

Total revenues for wireless products and services was essentially flat, seeing just a 0.5% decrease year-over-year to $22.6 billion. While wireless service revenue grew in both the consumer and business segments, Verizon said, that growth was countered by sharp reductions in equipment revenue because in-store customer engagement was limited by social distancing measures. Consolidated operating revenues for the company were down 1.6% to $31.6 billion.

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The largest U.S. wireless carrier by subscribers tempered its financial forecasts for the rest of the year, lowering its profit goals (see Matt Ellis’ remarks below) and withdrawing its revenue targets. In the first quarter, the company reported a slight drop in wireless subscribers as gains in business accounts were offset by a steep decline in new consumer accounts.

Verizon increased its bad-debt reserve by $228 million based on the number of customers it expected won’t be able to pay their bills. It and other carriers signed a pledge with the Federal Communications Commission not to cut off service for 60 days or charge late fees to consumers facing pandemic-related hardships.

“We were in a position of not really having any idea what the impact of the social distancing and shelter-in-place would [be],” said Matt Ellis, Verizon’s chief financial officer.  Verizon hasn’t disclosed how many customers have stopped paying, but Mr. Ellis said many consumers continue to pay their wireless bill even when they can’t pay their car loans or mortgages.

Verizon’s Progress towards their 2020 Goals:

Strengthen & Grow Core Business
•Driving digital sales through enhanced experiences
•Strengthened mmWave spectrum holdings through Auction 103

Leverage Assets to Drive New Growth
34 Ultra wideband cities live; 5G network build on plan
•BlueJeans acquisition announced in April expands portfolio

Drive Financial Discipline & Strength in Balance Sheet
•Disciplined spend with focus on operational efficiencies
•Scenario planning to navigate uncertainties

Infuse a Purpose-Driven Culture
•Continuing initiatives to drive meaningful difference to society
•Leading brand perception related to COVID-19 response

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CEO Hans Vestberg (English grammar is not very good and not corrected here) talked up VZ’s 5G and fiber plans on today’s earnings call:

When it comes to leverage our assets and we’re growing in the future our 5G plans and our fiber plans the build out of that are on plan. We were also a little bit ahead of plan when we ended the first quarter. And can I report still today we are on plan with the 5G and fiber. Of course, our challenge is out there when it comes to COVID-19 and so on.

But our team are finding new ways and innovative ways to actually do the deployment. There are ways of dealing with approvals from the municipalities set by new ways. And we have great collaborations from many of the municipalities to do it. There might be problems going forward but I am also confident that my team are very innovative in the field and see that we continue to drive hard on this.The 5G is still very much in the middle the center of our strategy. And as you heard me saying before we’re in the middle of the execution and we’re not halting that. We’re keeping it up all the time and the team is doing great work there. And we see opportunity with 5G going forward both with building all the cities, the 5G mobile edge compute as well as making this nationwide 5G still this year.

On top of that we increased the CapEx guidance in the quarter because we felt that it was a good time for us to continue to see that we have robust networks as we went into a moment in time we don’t really know how the network would be used. At the same time of course sending a message that we think is a good return on investment on that incremental CapEx.

Editor’s Note:  We find it beyond unbelievable that Verizon is such a 5G cheerleader, especially CEO Hans Vestberg, when the company is not even a member of 3GPP and doesn’t attend 3GPP (5G architecture and 5G core) or ITU-R WP5D meetings where IMT 2020 radio aspects (RIT/SRIT) are being standardized.  Yet their U.S. network provider competitors are all 3GPP members and attend 3GPP as well as ITU meetings.  The competitor list includes AT&T, T-Mobile, Dish, Comcast, Charter, C-Spire, and other network service providers.

Verizon CFO Matt Ellis said:

For adjusted EPS, we are revising our original guidance of 2% to 4% growth and are now guiding to a range of negative 2% to positive 2% change from the prior year. Our new estimated range is based on a scenario that assumes significant headwinds prevail throughout the second quarter.

We have limited visibility into the second half of the year, which will depend on various potential operating environments. We will continue to assess the impact of COVID on our business, including our bad debt reserve and expect to provide an update on our next earnings call based on how things develop between now and then.

You can watch Verizon’s earnings call webcast here.

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References:

https://www.verizon.com/about/investors/quarterly-reports/1q-2020-earnings-conference-call-webcast

https://seekingalpha.com/article/4339873-verizon-communications-inc-vz-ceo-hans-vestberg-on-q1-2020-results-earnings-call-transcript

https://www.wsj.com/articles/verizons-wireless-business-slowed-by-coronavirus-11587730044

Verizon 5G Ultra Wideband service at DoE’s Pacific Northwest National Laboratory

Verizon Business and the U.S. Department of Energy’s Pacific Northwest National Laboratory are working together on ways that 5G technology can improve national security, boost energy efficiency and aid scientific research. The #1 U.S. wireless carrier notes that the work is related to its overriding strategy of developing use cases for 5G that apply to universities, startups, large companies and consumers.   The use of Verizon’s 5G Ultra Wideband at the PNNL’s Richland WA location will help educate the lab’s federal sponsors on the impact and potential of 5G.
Verizon
Verizon recently installed its 5G Ultra Wideband service in Corning’s fiber optic cable manufacturing factory. (FierceWireless)
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“With Verizon, we plan to explore how cybersecurity will underpin 5G for critical infrastructure and how 5G will drive transformation in the protection of endpoint devices, advancement of artificial intelligence, the science behind autonomous systems and related internet of things applications,” Scott Godwin, PNNL’s general manager of Corporate Partnerships & Alliances, said in a press release. “This partnership fits squarely with PNNL’s commitment to explore the capability of new science and technology to further safety and security worldwide.”

“Our 5G Ultra Wideband network is built to support transformational innovations and solutions across all industries,” said Tami Erwin, CEO of Verizon Business. “There’s no doubt 5G’s increased data bandwidth and super-low lag will help play a critical role in evolving response connectivity and mission operations for first responders.  We’ve seen exciting use cases come out of our 5G First Responder Lab and are thrilled to see the new applications that will arise from our work with PNNL.”

This engagement is part of Verizon Business’ broader strategy to partner with customers, startups, universities and large enterprises to explore how 5G can disrupt and transform nearly every industry. Verizon operates five 5G Labs in the U.S. and one in London that specialize in developing uses cases in industries ranging from health care to public safety to entertainment. In addition, Verizon is setting up 5G labs on-premise for several customers as part of an ongoing initiative to partner on 5G-related use cases to help customers transform their industries.

Verizon 5G Labs and Dignitas are also using the 5G network to enhance e-sports. The goals are to improve participants’ performance and recovery and to enable innovative fan/participant interactions. The first e-sports training facility is at Verizon’s 5G lab. It will serve as Dignitas’ west coast headquarters and home to its league of champions.

References:

https://www.verizon.com/about/news/verizon-business-national-lab

https://www.verizon.com/about/our-company/5g-labs

Verizon Explores 5G Use Cases for National Security, Energy Efficiency at DOE Lab

Verizon to double 5G mmWave cities and use DSS by end of 2020

Verizon plans to double the number of cities covered by its mmWave based 5G wireless network by the end of the year.  The company also said it will expand its mmWave 5G coverage areas in the 31 cities where it already offers the service, according to a Fortune article citing comments from Verizon CEO Hans Vestberg. 
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CEO Vestberg also said that Verizon would expand its 5G Home fixed wireless Internet service to a total of ten cities during 2020, up from the five it currently covers. That’s noteworthy considering Verizon recently overhauled the offering to include a do-it-yourself installation component coupled with new, 3GPP-Release 15 5G NR compatible network equipment.”
Verizon did not name the additional cities it will expand 5G Home and mmWave 5G services.
“We have the opportunity to continue our journey to be the leader on 5G,” Verizon CEO Hans Vestberg said at a meeting with investors in New York on Thursday. “We’re not only expanding markets, we’re also expanding coverage in all the markets.”
Verizon’s announcements essentially counter worries that the company is shrinking from the daunting task of deploying commercial mobile services in mmWave spectrum bands. Due to the physics governing transmissions in such bands, signals in mmWave spectrum can only travel a few thousand feet at the most, and often cannot travel through obstacles like buildings, trees and glass.
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As a result, Verizon and other operators building mmWave networks have been forced to construct more “small cell” transmission sites – Verizon said it expects to build five times more small cell sites in 2020 than it did last year, according to the Fortune article. However, Verizon did not provide a specific number for its small cell ambitions.Importantly, Verizon’s Vestberg said the operator’s 5G actions are designed in part to encourage customers to upgrade to one of the company’s 5G service plans. Verizon currently charges an extra $10 per month for 5G access on its cheapest unlimited plan, and has promised to impose that fee on its more expensive unlimited plans sometime in the future.
Image result for verizon 5G imagesBut Verizon’s 5G efforts aren’t exclusive to its mmWave spectrum. Vestberg reiterated Verizon’s promise to expand 5G to other spectrum bands sometime this year.  The U.S. #1 wireless carrier plans to use Dynamic Spectrum Sharing (DSS)  which will let it share lower frequencies for use with 4G and 5G endpoint devices at the same time from one cell site. That would let it cover far more territory, though with slower download speeds.[Note  that T-Mobile has reported difficulties with at least one vendor in deploying DSS.]

Rivals have said the gear isn’t ready yet, but Vestberg pushed back on Thursday. “This year we will launch nationwide 5G based on dynamic spectrum sharing,” he said. “We’re going to launch that when we think it’s commercially right, when we see enough handsets out in the market.”

In other Verizon news, the company said it plans to expand its edge computing agreement with Amazon AWS, first announced late last year. The companies hope to operate a total of 11 edge computing sites by the end of 2020, up from one site when the pact was first announced.

Verizon’s announcements today reflect continued momentum by the operator in the realm of 5G. Unlike its rival AT&T, which is in the midst of building out a streaming video operation via its acquisition of Time Warner, Verizon has bet much of its corporate future on 5G. Thus, given the operator’s size and scope, it can be viewed as a bit of a 5G bellwether.

It’s difficult to gauge the details of Verizon’s 5G progress considering the company does not disclose important metrics like the number of 5G handsets it has sold, the number of 5G customers it counts, the number of 5G transmission sites it operates and the specific revenues it expects to derive from 5G.

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References:

https://fortune.com/2020/02/13/verizon-5g-mobile-network-double-number-of-cities/

https://www.lightreading.com/5g/verizon-doubles-down-on-mmwave-5g-with-new-60-city-deployment-goal/d/d-id/757490?

 

Verizon CEO Hans Vestberg’s technology related remarks on 4Q2019 earnings call

Note: Copy editing was done to correct grammar errors and delete extraneous words/phrases.

  • Our partnership with AWS Amazon on the 5G mobile edge compute, is a totally new way of accessing a market that we have not been into.
  • We fulfilled our 5G commitment to deploy in 30 cities. We made 31. We said we’re going to launch 5G Home with the NR standard. We did that, and we said we’re going to launch the first 5G mobile edge compute. We did that in Chicago in December.
  • If you think about our priorities for 2020, first of all, continue to grow on the core business. We showed this year we can continue to grow 4G and our core business, and that we’ll continue to do in 2020 as well, including building our network to be the best network in this market. Secondly is leveraging our new assets that we’re building.
  • We’re building out fiber. We’re building our 5G and seeing that we can start leveraging that with our customer.
  • This year, we’ll continue to have a lot of focus on our 5G build-out and we will come back to that later on how we see the 5G market when we will have an Investor Day later in February.

Verizon 5G Super Bowl

Verizon claims 5G leadership with 31 mobile cities, 16 NFL stadiums, 4 basketball arenas; launched 5G Edge and NR-based 5G Home

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  • We’re very excited about the opportunities that Verizon business group has, because that’s why we started building the Verizon Intelligent Edge Network some three, four years ago in order to actually address this market in the best way, and the traction we are seeing with our customers is really good.
  • So I think that our technology department have no constraints on what they need to do in 2020. This is what they have plans for in order for us to continue to fortify our 4G network, to continue with strong additions in the 5G as well as continue with our fiber build. And when it comes to the monetization of the fiber build, we’re already starting to do that.
  • Many of the fibers right now are going to our cell sites on air because that was a part of it. Then, of course, it has come a little bit later in monetization for our small and medium businesses and enterprise business, etc. But clearly, we’re already now seeing the benefits of doing that. So going into 2020, I think we have a very solid capital allocation for our capex.
  • Ronan Dunne (VZ CTO) already said in the beginning of the year that we’re going to have some 20 5G devices coming out in the market this year. So of course, we’re going to see more 5G devices coming out. It’s going to be more build in the markets in 2020 than we had last year. So of course, this is a year that there is going to be even more 5G things coming in. When it comes to any particular phones coming out in the market, we cannot really comment on it because that, we’ll leave to the company to do.
  • If this is a market which has a high degree of iOS, that means that when a 5G phone will come out from Apple, that will be important for many consumers to look into what they think is a good change. In our case, I think we’re building a unique 5G experience with our millimeter wave that nobody else is building and have the capability to do. So I think that’s really where the difference will come.
  • We already have the best 4G network as you have seen in the latest J.D. Power and RootMetrics. We’re going to continue to have that. So we’re going to give the best experience for customers. And we — and I’m confident that how we are building the network will make a big difference. And that’s why we also feel very confident if — with all these devices coming out, including if the iPhone would come out, that we will have a good chance to actually grab more customers that want to be on our network. When it comes to the spectrum and all of that, I mean, I think that I might have talked about this so many times. We have all the assets to deploy our 5G strategy when it comes to millimeter wave and using dynamic spectrum sharing, be available nationwide when our customers are ready.
  • Everything from spectrum to how you densify (wireless) networks and what type of software you put in, and that’s a long-term planning how to do that right. And I think that’s something where you — or people around us go wrong when I look at us because think about how we have been performing, and many actually thought that we would never sustain an unlimited. And the more the network is growing, we’re getting more and more headroom as we’re continuing deploying our software and the engineering capabilities we have in the company.
  • We think the C-band (3.7-to-4.2 GHz) is an important spectrum for many reasons. That frequency will be global. So roaming will be done on it, and that’s very important for U.S. market to get into that. And it’s very important for Verizon to get into that. But it’s not hindering our strategy right now to deploy a great 5G network and be able to capture the market for 5G.
  • On the CBRS, as you know, we have already started for quite a long time ago to do trials and see how it works, and it works fine. We think it’s a good addition to the portfolio that in order to see that we get good customer expectations. So we think CBRS is an important spectrum, even though it is sort of more share than anything else, but it’s going to be definitely something we’re using as it comes out.
  • Secondly, when it comes to the 5G Home, you’re confirming, actually what we have in front of us. The next-generation chipset that goes into the CP for 5G Home will come out. At least, the plan right now is in third quarter, which means that commercial product is probably coming out a little bit later because it takes some time from the chipset to the device. By then, we will have, of course, deployed far more millimeter wave across the country, so we will be able to start launching many more markets when that happens. So that will come back to a little bit more about that when have our Investor Day the 13th of February, talk a little bit more about it. But that’s in the grand scheme, the plans for 5G Home, and that’s no different from what we said half a year ago.
  • When it comes to the mix and match, we want to give our (residential) customers options on top of the broadband. If it’s the fiber broadband or if it’s the 5G Home broadband, we want to give them options. Of course, one option is always to have a broadband and having over-the-top services. But another is, of course, giving the mix and match option right now to see that they use the right packages that is more fitted for them. Still, of course, it’s what they can choose whatever channels you have because they come in packages. But the early — or early indication is, of course, that customers that has been on trial for a month, they clearly see what channels they’re using and what package we can suggest for that, that is going to be more optimized. So I think for us, we just think about our customers and where the market is going, and we want to give them the option of actually having different ways they can address the market when it comes to their content consumption. And I think it’s good for our customer experience, but it’s also good for our customers because all of them can do it. So as you said, it’s a little bit early, but I think that our customers are very happy that we’re giving them this option. And I think this is what everyone see where the market is going, meaning more and more over-the-top content is coming in and you want — you need thought, mixing and matching that. And here, we have a great opportunity given our service strategy, and we can work with all the type of option in the content market as we’re not owning any content.
  • We always do the trade-off between owning and leasing or sharing fiber with someone, and that is a very prudent or financially disciplined way of looking at our deployment. In many cases, we see it as owning it has really an advantage for us because of the multi-use of our network. Now we’re doing sites all the time. We’re going to create revenue for our business side. So we probably have a couple of years left on doing that. But in general, I feel good about the pace we have right now and the multi-use of the fiber we have. And I think this is one of the most critical assets in a network today — in today’s world, especially as we build Verizon Intelligent Edge Network and you want actually to start delivering the 5G experience that we’re expecting. We need this fiber to be there. So that’s basically where we are with the fiber.
  • We have already gotten Dynamic Spectrum Sharing (DSS) to work from the software point of view. And the majority of our baseband is ready for taking DSS. So what we have said, I’m not going to give you an exact date, but I’m going to tell you, we’re going to be ready when we feel the market is ready and our customers need to have that coverage. And again, remember, we want to have the best network performance-wise. We don’t want to deploy it because it’s called 5G. We want to see that we actually give a superior performance to our customers. And that’s why we think that the millimeter wave, what we’re doing there is extremely important because we talked about 10 to 20x, at least more throughput and speed than we have on the 4G network, and we still have the best 4G network. So I think that’s what we already assessed. When we meet at the Investor Day, we’re going to talk a little bit more about the technology sector.
  • When it comes to the 5G and where we are, I think that you saw last year that we had a strong deployment coming in during ’19, but of course, we have even higher ambitions in ’20. And we will also come back and talk a little bit about — more about that. But it goes in all three directions in our multipurpose network. It’s for the mobility case, for the home case, and it’s also for the 5G mobile edge compute case, not forgetting that, because all three of them are using our multipurpose network. And when it comes to use cases, I can do some of them.
  • On the mobile edge compute, we see a lot of optimization in factories. We see private 5G networks in order to keep the data and the security and the throughput in a facility, if that’s a campus, whatever, that use case has come up very early on.
  • What we can do with millimeter wave in the stadium, how we can use broadcasting cameras with 5G, a lot of new innovation, both with consumer, but also for the distribution of content. With our spectrum positioning, we basically are limited on the uplink when it comes to stadiums, which is the big blocker today in a stadium. So I think you’re going to see quite a lot next four or five days on consumer cases (at the NFL Superbowl in Miami, FL)  as well as we will continue to give you more insights to it the next couple of weeks and when we meet in New York here.
  • We have told you where 5G will come in, which is more of 2021. So we work with assets we have right now, but we build also a great foundation on 5G going forward for the years after.

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2020 Priorities for Verizon: Executing 2020 from a position of strength

1. Strengthen & Grow Core Business
• Extend our network leadership through continued innovation
• Strengthen and grow core business in Consumer, Business & Media
2. Leverage Assets to Drive New Growth
• Scale 5G / MEC / OneFiber & other assets for new growth
• Differentiate brand through trust & innovation
3. Drive Financial Discipline & Strength in Balance Sheet
• Accelerate revenue and earnings growth to drive strong cash flows
• Disciplined capital and operating spend
4. Infuse a PurposeDriven & CustomerCentric Culture
• Put customers at the center of everything we do
• Drive responsible business as part of our strategy

References:

https://www.fool.com/earnings/call-transcripts/2020/01/30/verizon-communications-inc-vz-q4-2019-earnings-cal.aspx

https://www.verizon.com/about/investors/quarterly-reports/4q-2019-earnings-conference-call-webcast

https://www.verizon.com/about/news/verizon-ends-2019-highest-4q-wireless-adds-six-years-increased-cash-flow-and-revenue-growth

 

Verizon FioS will no longer offer home television and internet on bundled plans

On January 9, 2020, Verizon stated it was eliminating multi-year contracts, multi-service bundles, weird added fees at the bottom of bills, and other nickel and dime cable charges. Instead, Fios will offer Internet at a couple of speeds, priced at $40 to $80 monthly, and a couple of TV packages, priced from $50 to $90. The channel line ups of the TV packages will be more customizable than in the past, as well.

“Customers have been loud and clear about their frustrations with cable, and we’ve listened. As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency,” says Frank Boulben, Senior Vice President of Consumer Marketing and Products at Verizon. “Customers are tired of having to buy a bundle with services they don’t want to get the best rates, and then discover that those rates didn’t include extra fees and surcharges. We’re putting an end to the traditional bundle contract and putting customers in control.”

To replace bundles, Verizon has chosen to give consumers greater flexibility through what it calls Mix & Match.  With Mix & Match, Verizon customers can choose between three internet tiers ranging from $40 to $80 per month, and from cable packages offered either through Verizon’s in-house Fios service or through the company’s partnership with YouTube TV.  Verizon offers three Internet speed options for FiOS customers – 100 Mbps, 300 Mbps and Gigabit Connection.

NOTE:  Triple-play bundles refer to long-term contracts with a company such as Comcast Corp. or Charter Communications Inc. that provide internet, television and landline phone service for one “discounted” rate. These packages force you to have an old-school home phone number, seemingly just for telemarketers to call, and dozens of TV channels you’ll never watch but will nevertheless subsidize. However, many subscribers only want a fast internet connection to binge on Netflix or Amazon Prime and gain access to a handful of their favorite network shows.

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Mix & Match builds on Verizon’s strategy to adapt to changing consumer habits; the company has reported a net loss in Fios TV subscribers every quarter since 2016 – coinciding with the rise of subscription-based internet streaming services.

Consumers can change their service selection each month, whereas Verizon had previously offered one- and two-year contracts for discounted introductory bundles. This practice sowed frustration among consumers, as many wanted internet alone but were forced to also buy home television, or because the service price escalated after the introductory contract expired, Verizon SVP Frank Boulben told The Wall Street Journal.

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AT&T is emblematic of the limitations of bundling in a sufficiently competitive environment: The company used lots of debt to pay over $150 billion to purchase DirecTV and Time Warner ($67 billion acquisition of satellite television provider DirecTV in 2015 and $86 billion acquisition of Time Warner in 2018). The goal was to build up its media assets and combine with its wireline and wireless networks to distribute new content.  Unfortunately for AT&T, it hasn’t been able to leverage those combined assets via bundles in a way that drives consumer interest and subscriptions.  AT&T executives proclaimed the mergers would bring “a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”

Many Wall Street analysts at the time expressed concern that the debt incurred from the company’s mergers would make that goal untenable.  And they were right!  AT&T’s bottom line has been bleeding from loss of DirecTV customers while they have not yet been able to monetize the content obtained from Time Warner.

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As Verizon runs into similar problems in the home, it’s increasing the modularity of its product options and also expanding into segments like VR and cloud gaming. How Verizon fares with this new approach in its home business will be an instructive lesson for the wireless industry as a whole — particularly as mobile operators continue to pursue bundling as a strategy outside the home as well, pairing mobile offerings with media to draw in and retain mobile subscribers.

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References:

https://www.verizon.com/about/news/verizon-disrupts-cable-industry

https://www.businessinsider.com/verizon-discontinues-bundling-internet-cable-services-2020-1

https://www.latimes.com/business/story/2020-01-09/verizon-breaks-the-cable-bundle-but

U.S. telcos on 5G rollouts (“vague promises”), devices, IoT/smart cities

Here’s what AT&T, Sprint, T-Mobile, and Verizon said about their 5G network rollouts, soon-to-be available devices, and Smart City plans at CES 2020:

AT&T on 5G Devices, Network Plans:

Carrier and media goliath AT&T talked about 5G devices at this year’s CES event in Las Vegas, NV.  Currently, AT&T only sells one 5G-capable phone, the Samsung Galaxy Note 10 Plus 5G, but AT&T plans to have 15 5G phones available for use on its low-band 5G spectrum during 2020 (see Comment in the box below this article). The Dallas-based service provider said that other mobile devices, such as laptops, tablets, and hotspots will also be available this year, but no exact number of products were provided.

AT&T’s low-band 5G network went live in December 2019 and is currently available in parts of 19 cities. The carrier’s other 5G network that is built on millimeter-wave and is referred to as 5G Plus is live in parts of 35 cities. AT&T said that it plans to cover 200 million people with its 5G network by this summer.

Sprint IoT, Smart City Updates:

Wireless provider Sprint could merge with T-Mobile any day now, but the Overland Park, Kansas-based carrier hasn’t slowed down in the meantime. Sprint took to CES to launch several new offerings and update the market on its IoT plans.

Sprint unveiled its Certainty network design model, which unites its entire business wireline portfolio, including its wireless, IoT, and security solutions. The carrier also launched IoT Factory 2.0, a dedicated platform that solution providers and businesses can use to build custom IoT solutions for small-to-mid sized businesses in the food service, healthcare and agriculture space.

Chris Brydon, Regional Vice President Sales, Sprint Business Northwest Region via LinkedIn:

We believe hashtagIoT has the power to improve people’s lives. Here’s a story illustrating how an IoT application can be so much more than just a cold, lifeless piece of tech. Watch the very human difference it makes in the lives of a man and his family. https://lnkd.in/gdyeT9N hashtagWorksForBusiness

Sprint updated the market on its Smart City initiative on Tuesday. Specifically in Georgia, the provider said that in 2020 “micropositioning” technology, which combines next-generation wireless technologies and small cells will be installed within city infrastructure in areas to enable real-world navigation for autonomous machines, more connected sensors and IoT solution testing in its innovation Center for solutions such as refrigeration and monitoring, and security robots in Peachtree Corners’ Town Hall. Sprint also has plans to integrate additional Smart City technology in Greenville, South Carolina, and Arizona State University.

T-Mobile Talks 5G, Avoids Sprint Mega-Merger Talk:

T-Mobile didn’t address the main topic on everyone’s mind when thinking about the Magenta-colored carrier: its in-progress $26 billion mega-merger with wireless competitor Sprint. Instead, the “Un-Carrier” took to the show to highlight its 5G connectivity.

In a surprising move last month, the Bellevue, Wash.-based provider launched its nationwide 5G network using 600 MHz spectrum acquired in the recent incentive auction, as well as two 5G phones capable of using its 600 MHz spectrum. T-Mobile originally planned to launch the network in 2020.

 Verizon 5G Devices and Ultra Wideband Availability:

AT&T’s biggest competitor, Verizon, also came to CES armed with 5G updates. Compared to AT&T’s 15 devices, Basking Ridge, N.J.-based Verizon vowed to have 20 5G-capable devices in 2020 and said these devices would be competitively priced anywhere between $600-$800. Currently, Verizon has four 5G-capable smartphones. Subscribers interested in 5G will have to pay an additional $10 on top of their current unlimited data plan, Verizon said, but the company didn’t name any specific device manufacturers.

Verizon’s ultra wideband 5G network is available in parts of 30 cities today, including Chicago, Los Angeles, and New York City, as well as Hoboken, N.J. Des Moines, Iowa; and Providence, RI.  Please see Comment in the box below this article.

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Mike Dano of Lightreading wrote that AT&T and Verizon made “vague (uncertain?) promises” for their 5G mmWave networks:

in a New Year-themed post, AT&T’s Scott Mair wrote that “you’re in for an exhilarating ride on the AT&T 5G network in 2020 and beyond,” but he did not offer any specifics about what the carrier will do with its “5G+” network. Then, during a subsequent appearance at an investor event this week, AT&T CFO John Stephens said only that the operator’s 5G network would “continue to improve and grow.”

Similarly, Verizon touted its “vision” for its network in 2020 in a release issued this week, but said only that customers should “expect more great innovations and technology advancements from us in 2020 including a more aggressive build out of our 5G network.” At that same investor event, Verizon’s Ronan Dunne said “we will be continuing to drive hard” in 5G, but didn’t offer any specifics.

The bottom line here is that neither operator is offering any concrete information on the number of cities, cell sites or customers it plans to touch with mmWave 5G in 2020. As Heavy Reading analyst Gabriel Brown writes, it’s time for these operators to show their hands.

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From a marketwatch.com article titled: The long-promised ‘Year of 5G’ arrives with more promises and little 5G

For years, telecommunications companies and gadget makers have invaded CES to talk about how big 5G was going to be in 2020.

At CES 2020 though the promise was still unfulfilled as the faster wireless service is still spotty and not entirely what was envisioned.

Without the premier connections that were promised, it is questionable how many consumers will buy the more expensive 5G-enabled devices that were introduced at the giant trade show this year, even though the same glowing predictions of a new future were readily available throughout Las Vegas.

5G promises faster data speeds, a reduction in lag time, and greater density for smart devices, all things that could eventually be catalysts for futuristic applications like autonomous driving and connected cities. More immediately, carriers are focused on exposing businesses and customers to those faster data speeds, where and when they can.

Verizon Communications Inc. expects to launch 20 devices with access to 5G by the end of the year, up from the seven that currently exist, according to Tami Erwin, who heads the company’s business group. AT&T Inc. mobility executive Kevin Petersen told MarketWatch at CES that accessibility will also be a key theme in the year ahead.

T-Mobile US claimed that it conducted a nationwide 5G rollout at the end of last year, providing access over a greater area but at slower data speeds than competitors. Verizon and AT&T both plan to add new cities to their coverage later this year, with AT&T still expecting to have nationwide coverage this year also.

Bob O’Donnell, president of TECHnalysis Research, cautions that these upgrades won’t happen right away due to some technical aspects of the 5G rollout. The more exciting type of 5G, millimeter-wave spectrum, primarily works outdoors and on campuses where it’s been specifically deployed. Sub-6 5G service works indoors and offers some benefits in speed and latency, but it’s a less dramatic step up from the 4G service consumers have come to know.

“The pieces are coming together but the forward-looking benefits are still a few years off,” O’Donnell said. Part of the issue is that 5G currently runs on top of 4G, rather than in a stand alone manner. Moving to stand alone 5G requires that carriers “refarm” spectrum frequencies from 4G to 5G, but they’re hesitant to make that big leap right away while most customers are still using 4G connections and while few phones support 5G.

“That’s like opening a 10-lane highway only for people with electric cars,” he said, since only a small minority of drivers would have access.

Making 5G a reality is a bit of a “chicken and egg” scenario, according to O’Donnell, given that carriers thinking about moving away from 4G want there to be enough devices in the market to take advantage of the new wireless standard, and consumers want to make sure 5G networks are broad enough before investing in a mobile device that works on the network.

The device part of the equation showed signs of progress at CES, with connected PCs being one notable category. Lenovo Group Ltd. announced it will launch in the spring the Yoga 5G two-in-one device, which it says is the first 5G PC. Always-connected PCs let customers rely on cellular connectivity rather than hunt for WiFi networks, and the 5G products shown by Lenovo, HP Inc. HPQ, and others offer faster speeds than 4G ones currently on the market.

Those devices are more expensive than competitive gadgets without access to the technology, though, and that will most likely continue to be the case. Samsung Electronics Co. Ltd. will be holding a smartphone launch in early February, where the company is expected to introduce a family of 5G Galaxy devices, and Apple is thought to be planning a 5G iPhone rollout later this year, with analysts expecting the 5G versions of those popular smartphones to carry a higher price tag.

Instinet analyst Jeffrey Kvaal expects “a large increase” in 5G unit sales for 2020, up from a small base of sales last year, but he thinks most of these sales will come at the expense of 4G devices, rather than a rush of upgrades. He estimates that 5G could boost a phone’s retail price by at least $75.

Today’s devices tend to be in the $1,000-plus range, but consumers should “start to see prices coming down, which ultimately helps the adoption curve,” as more mid-tier devices come to market this year equipped with 5G capabilities. Verizon’s consumer chief executive Ronan Dunne said at a Citi investor conference earlier this week that there could be 5G devices priced below $600 by the end of the year.

AT&T Chief Financial Officer John Stephens told investors at the Citi conference that trying to predict 5G unit sales is missing the point a bit, since handset sales are “not a profitable enterprise for a business like ours.” The company sees various new service revenue opportunities from being able to compete “in the geographies where our service has gotten much better.”

The promise of 5G goes well beyond smartphones, and executives pointed out that the services that have developed in the past decade likely wouldn’t have existed without the move to 4G.

“If someone was watching a streaming video on a connection 10 years ago, you would’ve swatted the phone out of their hand and said they were going to use up the whole monthly data plan in 13 seconds,” Qualcomm’s  vice president of engineering John Smee told MarketWatch. Now, streaming over wireless is commonplace. Verizon’s Erwin noted that the proliferation of ride hailing also wouldn’t have been possible without the upgrade in data speeds.

AT&T’s Petersen thinks it’s too soon to know what the killer use case for 5G will be, but he’s upbeat about its ability to provide upgraded experiences in gaming, translation and medicine. A reduction in latency, or lag time, could create better responsiveness for gamers and reduce awkward pauses when people are using mobile devices to translate from one language to another in real time. Doctors could more easily monitor patients remotely after procedures by using connected devices.

Over time, the expected benefits of 5G and the growth of accessible smart devices could change the way consumers and workers think about doing data-heavy tasks. Smee even suggested that it could replace the need for Wi-Fi for most users.

“If you think of your cable modem or your DSL and you look at the rates you get compared to the 5G data rate, all of a sudden wireless is the preferred medium and that’s a big game changer versus the idea that you have to have wired connectivity to have high data rates,” he said.

References:

https://www.crn.com/slide-shows/networking/ces-2020-top-telecom-carriers-talk-5g-new-devices-and-iot

https://www.lightreading.com/mobile/5g/heres-why-it-might-be-time-to-worry-about-mmwave-5g/a/d-id/756706?

https://www.marketwatch.com/story/ces-2020-the-long-promised-year-of-5g-arrives-with-more-promises-and-little-5g-2020-01-10