Verizon faces tough times as 5G fails to generate a decent ROI

In 2021, Verizon spent more than $50 billion at FCC auctions to acquire mid-band C-band spectrum licenses for 5G. Along with AT&T,  it negotiated a high-profile battle with the U.S. airline industry and FAA to put those spectrum licenses into commercial operations at the beginning of this year.

Verizon launched a C-band 5G network covering 130 million people – almost half of the U.S. population- in the 1st quarter of 2022. By the end of the first quarter, around 40% of Verizon‘s customers owned 5G gadgets capable of accessing the network, and it’s already carrying almost a third of all of Verizon‘s data traffic where it is available.

According to results from network-monitoring company OoklaVerizon‘s 5G download speeds doubled via to its C-band network launch.  However, the effort has been costly. Verizon‘s quarterly capital expenses (capex) spiked during the first quarter thanks to the $1.5 billion it spent during the period on the network equipment necessary to put its C-band licenses into action. That figure doesn’t include the extra money Verizon spent on its massive marketing campaign, which included $1,000 handset subsidies and a $1,000 switcher credit, during the quarter to promote the new network.

What does Verizon have to show for all its mid-band 5G investments? So very much as Moody wrote in a report skeptical on 5G monetization.

In the 1st quarter of 2022, Verizon lost 36,000 postpaid phone customers. While that’s certainly an improvement over the operator’s quarterly performance from a year ago, and also better than some financial analyst expectations, it stands in stark contrast to the 691,000 new postpaid phone customers AT&T netted during the periodAT&T, for its part, has delayed slightly its own big mid-band 5G network buildout until next year.

Moreover, Verizon executives acknowledged that the company saw a slowdown in new customers signing up for Verizon service starting in February and accelerating into March, just as the operator’s C-band marketing campaign ramped up.

David Barden, a financial analyst with Bank of America Merrill Lynch, called out the situation during Verizon‘s quarterly conference call on Friday. “There was a time when Verizon had the best network and could charge the highest prices. And on these calls we would talk about margins and obtainable market share,” he said. “You guys are now [market] share donors. And we’re celebrating how many 5G phones we have and how much C-band we’re deploying, but it’s not obvious that that’s translating into something tangible that investors can celebrate in terms of financial reward. So can we talk a little about that?”

Verizon‘s management team, including CEO Hans Vestberg, argued that “our focus over time is to grow this business.”

“We’re going to compete well,” Vestberg said, adding that “we see more excitement in the market where we offer C-band.”

“This is going to pay off big time in 5-10 years,” he said of Verizon‘s broad 5G investments.

However, he also conceded that Verizon could suffer from inflationary pressures on its labor and energy costs. And, like AT&T CEO John Stankey, he said Verizon may consider raising service prices as a result.

Verizon has lowered their 2022 guidance to the low end of their previous range on every key metric, and they cut their forecast for service and other revenue growth to flat (from +1.0-1.5% previously).  The company warned that it now expects its full-year 2022 financial results to come in at the low end of its previously announced guidance.  Nonetheless, “we remain well positioned to achieve our long-term growth targets,” Vestberg said.

Analysts don’t seem to agree with Vestberg’s optimism:

Verizon is growing neither its subscriber base nor its ARPU [average revenue per user]. At a time of rising inflationary pressures, pricing power is nowhere to be found,” wrote the colleague Craig Moffett at MoffettNathanson in a note to clients following the release of Verizon‘s first-quarter results. “And on the unit side, Verizon is already losing share. Unless something changes for 5G revenues that still seem rather intangible (IoT, MEC [multiaccess edge computing], or private networks), the growth runway for Verizon would appear rather weak.”

“There are areas for concern outside of the Wireless segment. Again like AT&T, their Wireline segment is a drag on growth that is only getting worse (their results in Business Wireline, in particular, were – like AT&T’s yesterday – shockingly weak). That puts even more of an onus on the Wireless unit to grow.”

“Things aren’t likely to get easier. Consolidated operating revenue (as reported) of $33.6B was 0.3% below consensus of $33.7B. With such anemic growth, the inflation backdrop is a troubling one. Costs will rise faster than revenues.”

Moffett sees “no easy answers” for Verizon. It could “bow to the pressure” and increase promotions, but he noted that this would further constrain average revenue per user growth for both Verizon and the broader industry. The company could stay disciplined with its pricing and promotional strategies, but doing so would risk further subscriber losses at a time when Verizon’s network advantage over rivals is in jeopardy.  “In summary, the path forward remains a challenging one,” Craig concluded.

Financial analysts with New Street Research wrote: “We do remain concerned about Verizon‘s longer-term prospects in wireless, fueled by T-Mobile‘s lead over Verizon on deploying upper mid-band [spectrum] and big lead on total holdings in mid-band spectrum.  Verizon management’s aspirations for strong service revenue growth driven by rising ARPU and growing subscribers also still seem way too optimistic in the face of rising competition from a challenger [T-Mobile] with a similar (if not soon-to-be better) network offering priced at a steep discount.”

The New Street analysts also acknowledged that there are widespread expectations that overall growth in the U.S. wireless industry will start to slow sometime this year and that Verizon could be the first 5G operator to suffer from that trend that may eventually affect all of the market’s players.

References:

https://www.lightreading.com/5g/is-verizons-big-5g-gamble-falling-apart/d/d-id/776998?

https://www.marketwatch.com/story/verizon-earnings-show-loss-of-phone-subscribers-but-strong-broadband-gains-11650629381

Moody’s skeptical on 5G monetization; Heavy Reading: hyperscalers role in MEC and telecom infrastructure

IBD – Controversy over 5G FWA: T-Mobile and Verizon are in; AT&T is out

Two of the three biggest U.S. telecom network providers, T-Mobile US and Verizon Communications, contend that selling 5G FWA (Fixed Wireless Access) broadband services to homes will prove to be a good business. However, AT&T has no plans to make a big push into that space.  We wrote about this topic earlier this year, but it remains a conundrum as debate continues.

Whether these 5G FWA services will heat up broadband competition with cable TV companies — who dominate in high-speed internet services — is a controversial issue for telecom stocks. The fixed 5G wireless services also may compete with local phone companies in areas still served by copper line-based “DSL” services.

Verizon and T-Mobile think the service can be a growth driver and will have attractive economics,” UBS analyst John Hodulik told Investor’s Business Daily (IBD). “FWA (fixed wireless access) is likely to do better where there are limited options for broadband and among subscribers used to lower speeds, so that means legacy DSL subscribers and slower speed cable.  The big question is whether FWA has staying power over the next 5 to 10 years given necessary speed increases.”

AT&T has downplayed the potential of fixed 5G wireless. AT&T contends that as data usage surges over time, FWA will become increasingly uneconomic vs. fiber-optic landline alternatives.

“I think it stems from a genuinely different view of the engineering and capacity constraints,” MoffettNathanson analyst Craig Moffett told IBD. “The divergence in views about fixed wireless access between AT&T and Verizon or T-Mobile speaks to a genuine controversy in the telecom industry.”  Craig added that telecom companies are scrambling to make money from huge investments in 5G radio spectrum.

Moffett said: “The renewed appetite for FWA may be a sign of a dawning realization that the gee-whizzy use cases of 5G may never materialize. That could be forcing operators to revisit every possible source of incremental revenue in a bid to earn at least some return on their huge investments in 5G spectrum.”

U.S. fixed wireless access (FWA market) captured ~ 38% share of broadband industry net adds in the fourth quarter of 2021.  Approximately half of Verizon’s FWA customers are coming from commercial accounts, T-Mobile has indicated that about half its FWA customers are coming from former cable Internet subscribers.  FWA’s strong Q4 showing left cable’s flow share at just 66%, about the same as cable’s share of installed US broadband households. “In other words, Cable likely neither gained nor lost share during the quarter, and instead merely treaded water,” Moffett noted.  FWA “has gone from low-level background noise to suddenly a major force, with Verizon and T-Mobile alone capturing more than 300K FWA subscribers in the fourth quarter,” Craig noted.  However, he isn’t sure that wireless network operators will allocate enough total bandwidth capacity for FWA to fully scale.

In a government auction that ended in early 2021, Verizon spent $45.45 billion on 5G “C-band” airwaves while T-Mobile invested $9.3 billion. AT&T spent $23.4 billion on the auction but it’s putting its 5G investments in areas other than FWA, like industrial 5G applications.

Meanwhile, there are cable TV firms looming with high-speed, coaxial cable. Comcast says it’s not worried about broadband competition from fixed 5G wireless services to homes.

“Time will tell, but it’s an inferior product,” Comcast Chief Executive Brian Roberts said at a recent Morgan Stanley conference. “And today, we can say we don’t feel much impact from (it). It’s lower speeds. And in the long run, I don’t know how viable the technology holds up.”

Cable companies offer hard landlines while 5G wireless services provide high-speed internet to homes mainly via indoor antennae that consumers self-install.

Eighty-seven percent of U.S. households subscribe to an internet service at home, compared with 83% in 2016, according to Leichtman Research Group. Also, cable TV firms comprise 70% of the broadband market, LRG said.

Verizon ended 2021 with 223,000 fixed wireless broadband customers, but most connected via 4G wireless networks. Meanwhile, T-Mobile had 646,000 fixed 5G broadband subscribers.

T-Mobile has told Wall Street analysts it expects to serve in a range of 7 million to 8 million fixed 5G wireless subscribers by 2025. Verizon has projected 3 million to 4 million subscribers over the same period.

T-Mobile charges $50 monthly for its home internet service. Verizon’s pricing starts at $50 or $70 monthly, depending on the data speeds provided. Verizon mobile phone customers with unlimited data plans get a discount.

T-Mobile’s 5G internet to home services provides data speeds up to 115 megabits per second, or Mbps. Verizon plans to provide speeds up to 300 Mbps.

T-Mobile uses mid-band radio spectrum to deliver fixed 5G broadband to homes. Verizon uses a mix of mid-band and high-band radio spectrum. In urban areas, Verizon may be able to deliver higher internet speeds with high-band spectrum, analysts say.

One area of debate remains whether fixed 5G broadband finds more success in suburban/urban markets or in rural areas.

“FWA is definitely a threat to cable companies,” Peter Rysavy, head of Rysavy Research, said in an email. “Particularly with (high frequency) mmWave, 5G can compete directly with cable. Mid-band spectrum is also effective but is best suited for lower density population areas. In these deployments, even T-Mobile limits the number of fixed wireless subscribers it can support in any geographical area.”

At UBS, Hodulik says that even if positioned as a low-end service, fixed 5G broadband still has a potential market of 20 million to 30 million homes.

AT&T, whose forerunner was regional Bell SBC Communications, has a sizable wireline local service area in 22 states. So it will face competition from fixed 5G broadband, just like cable TV firms. Verizon is based mainly in the northeast. T-Mobile doesn’t sell local phone services.

“AT&T has a huge wireline asset base that is only 25% upgraded to fiber,” Oppenheimer analyst Tim Horan told IBD. “So they are very exposed to competition from fixed wireless.”

At an analyst day on March 11, AT&T said it plans to upgrade 50% of its local markets, about 30 million customer locations, to high-speed fiber-optic broadband service by year-end 2025.

Meanwhile, AT&T CEO John Stankey commented on the controversy over FWA.  AT&T sees FWA as playing a limited role for mobile small business and enterprise applications as well as in rural areas.

“We’re not opposed to fixed wireless, and I’m sure there’s going to be segments of the market where it’s going to be acceptable and folks are going to find it to be adequate right now,” Stankey said.

Fixed 5G broadband services to homes isn’t the only potential moneymaker for telecom network providers. Verizon, AT&T and T-Mobile aim to upgrade mobile phone users to unlimited data plans.  They also plan to sell “private 5G” connections to businesses, Internet of Things (IoT) and 5G connections to industrial devices.

References:

Why The Controversy Over 5G Home Broadband Isn’t Going Away

Will 2022 be the year for 5G Fixed Wireless Access (FWA) or a conundrum for telcos?

MoffettNathanson: Robust broadband and FWA growth, but are we witnessing a fiber bubble?

 

AT&T, Verizon Propose C Band Power Limits to Address FAA 5G Air Safety concerns

AT&T and Verizon said today that they would limit some of their 5G wireless services for six months while federal regulators review the signals’ effect on aircraft sensors, an effort to defuse a conflict about C band interference that has roiled both industries.

The cellphone carriers detailed the proposed limits Wednesday in a letter to the Federal Communications Commission (FCC). The companies said they would lower the signals’ cell-tower power levels nationwide and impose stricter power caps near airports and helipads, according to a copy reviewed by The Wall Street Journal.   This comes after, both companies agreed to push back their 5G C band rollouts by an additional month to January 5, 2022 after the FAA issued a Nov. 2 bulletin warning that action may be needed to address the potential interference caused by the 5G deployment.

“While we remain confident that 5G poses no risk to air safety, we are also sensitive to the Federal Aviation Administration‘s desire for additional analysis of this issue,” the companies said in the letter to FCC Chairwoman Jessica Rosenworcel.

“Wireless carriers, including AT&T and Verizon, paid over $80 billion for C-band spectrum—and have committed to pay another $15 billion to satellite users for early access to those licenses—and made those investments in reliance on a set of technical ground rules that were expressly found by the FCC to protect other spectrum users.”

AT&T and Verizon said they had committed for six months to take “additional steps to minimize energy coming from 5G base stations – both nationwide and to an even greater degree around public airports and heliports,” and said that should address altimeter concerns.

Wireless industry officials have held frequent talks with FCC and FAA experts to discuss the interference claims and potential fixes, according to people familiar with the matter. An FCC spokesman said the agreed-upon limits “represent one of the most comprehensive efforts in the world to safeguard aviation technologies” and the agency will work with the FAA “so that 5G networks deploy both safely and swiftly.”  Wireless groups argue that there have been no C-Band aviation safety issues in other countries using the spectrum.

Earlier this month, the Federal Aviation Administration (FAA) warned it could restrict U.S. airspace in bad weather if the networks were turned on as planned in December. The FAA warning came in the thick of cellphone carriers’ network upgrade projects.  A spokesman for the FAA called the proposal “an important and encouraging step, and we are committed to continued constructive dialogue with all of the stakeholders.” The FAA believes that aviation and 5G service in the band telecom companies have planned to use can safely coexist, he said.

AT&T and Verizon said they would temporarily lower cell-tower power levels for their 5G wireless services nationwide.

Photo Credit: GEORGE FREY/AGENCE FRANCE-PRESSE/GETTY IMAGES

Wireless industry executives don’t expect the temporary limits to seriously impair the bandwidth they provide customers because networks already direct signals away from planes and airport tarmacs, according to another person familiar with the matter.

Still, the voluntary limits are a rare step for wireless companies that place a high value on the spectrum licenses they hold. U.S. carriers spent $81 billion to buy licenses for the 5G airwaves in question, known as the C-band, and spent $15 billion more to prepare them for service this winter.

The carriers earlier this month delayed their rollout plans until early January after FAA leaders raised concerns about the planned 5G service. Air-safety officials worried the new transmissions could confuse some radar altimeters, which aircraft use to measure their distance from the ground.

At an industry event last week, FAA Administrator Steve Dickson said conducting flights in a safe manner and tapping spectrum for 5G services can both occur. He said the question was how to “tailor both what we’re doing in aviation so that it dovetails with the use of this particular spectrum.”  Mr. Dickson said another focus is the use of the spectrum in other parts of the world and how it differs compared with the U.S. “That’s what the discussions are that we’re having with the telecoms right now.”

U.S. wireless companies send 5G signals over lower frequencies than the altimeters, but air-safety officials worried that some especially sensitive sensors could still pick up cell-tower transmissions. Regulators in Canada and France have also imposed some temporary 5G limits.

The carriers’ letter said the mitigation measures would provide more time for technical analysis “without waiver of our legal rights associated with our substantial investments in these licenses.”

C-band limits are most relevant to AT&T and Verizon, which paid premiums to grab licenses for the new signals ready for use in December 2021. The companies still plan to launch their service, subject to the new limits, in January 2022. The proposed limits would extend to July 6, 2022 “unless credible evidence exists that real world interference would occur if the mitigations were relaxed.”

Rival carrier T-Mobile US Inc. is less vulnerable to delay because it spent a smaller amount for licenses that are eligible for use in December 2023. It also controls a swath of licenses suitable for 5G that aren’t subject to air-safety claims.

It’s not yet clear whether the proposal will be accepted by the FAA, which has warned pilots of the possibility that “interference from 5G transmitters and other technology could cause certain safety equipment to malfunction, requiring them to take mitigating action that could affect flight operations.” After July 6th, both carriers say they’ll set everything back to normal “unless credible evidence exists that real-world interference would occur if the mitigations were relaxed.”

“Our use of this spectrum will dramatically expand the reach and capabilities of the nation’s next-generation 5G networks, advancing US leadership, and bringing enormous benefits to consumers and the US economy,” Verizon and AT&T claimed in their joint letter sent to the FCC.

The federal agencies and the companies they oversee are meanwhile stuck in what New Street Research analyst Blair Levin called “a deep state game of chicken” guided by each regulator’s particular interest, with no clear path towards resolution.

References:

https://www.wsj.com/articles/at-t-verizon-propose-5g-limits-to-break-air-safety-standoff-11637778722

https://www.wsj.com/articles/fight-over-5g-and-aviation-safety-clouds-big-outlays-made-by-at-t-verizon-11636894800?

https://www.bloomberg.com/news/articles/2021-11-24/at-t-and-verizon-to-cut-5g-power-to-meet-aviation-safety-worries

https://www.reuters.com/technology/att-verizon-agree-new-precautions-address-5g-air-safety-concerns-2021-11-24/

 

C-Band 5G’s Threat to Aviation

Analysis: FCC’s C band auction impact on U.S. wireless telcos

Importance of FCC C Band Auction for 5G in the U.S.

https://transportation.house.gov/news/press-releases/committee-leaders-urge-fcc-to-act-to-protect-aviation-safety-amid-5g-broadband-implementation

 

Verizon partners with Amazon Project Kuiper to offer FWA in unconnected and underserved areas

Today at the 2021 Mobile World Congress (MWC) Los Angeles CA, Verizon and Amazon announced a strategic collaboration that will combine Verizon’s 5G wireless network with Amazon’s Project Kuiper constellation of low-Earth orbit (LEO) satellites. The first offering from the new partnership will backhaul Verizon’s cell sites through Amazon’s LEO satellites, enabling Verizon to offer fixed wireless access (FWA) in unconnected rural or underserved areas.

As part of the collaboration, Project Kuiper and Verizon have begun to develop technical specifications [1.] and define preliminary commercial models for a range of connectivity services for U.S. consumers and global enterprise customers operating in rural and remote locations around the world.

Note 1.  There are no 3GPP specifications or ITU recommendations for the use of LEO satellites for 5G (IMT 2020/ITU-R M.2150) backhaul.  Therefore, new carrier specifications are needed for 5G RANs to use LEO satellite networks for backhaul.

However, 3GPP is planning to include non-terrestrial networks (NTN) and to address satellite’s role in the 5G vision in their Release 17 package of specifications, to be released next year.  You can read an overview of 3GPP NTN’s here.

ITU-R SG 4 is responsible for Satellite services.  That includes Systems and networks for the fixed-satellite service, mobile-satellite service, broadcasting-satellite service and radiodetermination-satellite service.  In particular,

Working Party 4B (WP 4B) – Systems, air interfaces, performance and availability objectives for FSS, BSS and MSS, including IP-based applications and satellite news gathering

ITU-R WP4B carries out studies on performance, availability, air interfaces and earth-station equipment of satellite systems in the FSS, BSS and MSS. This group has paid particular attention to the studies of Internet Protocol (IP)-related system aspects and performance and has developed new and revised Recommendations and Reports on IP over satellite to meet the growing need for satellite links to carry IP traffic. This group has close cooperation with the ITU Telecommunication Standardization Sector. Of particular interest are:

  • Terms of Reference for Working Party 4B Correspondence Group on satellite radio interface technologies for the satellite component of IMT-2020.
  • Working document towards a preliminary draft new Report ITU-R M.[XYZ.ABC] on Vision and requirements for satellite radio interface(s) of IMT-2020

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Amazon’s Project Kuiper is an initiative to increase global broadband access through a constellation of 3,236 satellites in low Earth orbit (LEO) around the planet. The system will serve individual households, as well as schools, hospitals, businesses and other organizations operating in places where internet access is limited or unavailable. Amazon has committed an initial $10 billion to the program, which will deliver fast, affordable broadband to customers and communities around the world.

The Verizon-Amazon partnership seeks to expand coverage and deliver new customer-focused connectivity solutions that combine Amazon’s advanced LEO satellite system and Verizon’s world-class wireless technology and infrastructure. To begin, Amazon and Verizon will focus on expanding Verizon data networks using cellular backhaul solutions from Project Kuiper. The integration will leverage antenna development already in progress from the Project Kuiper team, and both engineering teams are now working together to define technical requirements to help extend fixed wireless coverage to rural and remote communities across the United States.

Verizon Chairman and CEO Hans Vestberg said, “Project Kuiper offers flexibility and unique capabilities for a LEO satellite system, and we’re excited about the prospect of adding a complementary connectivity layer to our existing partnership with Amazon. We know the future will be built on our leading 5G network, designed for mobility, fixed wireless access and real-time cloud compute. More importantly, we believe that the power of this technology must be accessible for all. Today’s announcement will help us explore ways to bridge that divide and accelerate the benefits and innovation of wireless connectivity, helping benefit our customers on both a global and local scale.”

Amazon CEO Andy Jassy said, “There are billions of people without reliable broadband access, and no single company will close the digital divide on its own. Verizon is a leader in wireless technology and infrastructure, and we’re proud to be working together to explore bringing fast, reliable broadband to the customers and communities who need it most. We look forward to partnering with companies and organizations around the world who share this commitment.”

This partnership will also pave the way for Project Kuiper and Verizon to design and deploy new connectivity solutions across a range of domestic and global industries, from agriculture and energy to manufacturing and transportation. The Kuiper System is designed with the flexibility and capacity to support enterprises of all sizes. By pairing those capabilities with Verizon’s wireless, private networking and edge compute solutions, the two will be able to extend connectivity to businesses operating and deploying assets on a global scale.

Betsy Huber, President, The National Grange said: “The agriculture industry is going to see dramatic changes in how it operates and succeeds in the next several years. Smart farms, bringing technology to agriculture, and connecting the last mile of rural America will be at the forefront of helping our industry to provide food for billions around the globe. Ensuring connectivity in rural areas will be key to making these endeavors a success. We’re excited to see the leadership from both companies working together to help take our industry to the next level.”

Financial analysts at New Street Research said the opportunity could be worth billions of dollars to the two companies. Specifically, they argued that Verizon’s wireless network currently does not cover around 7 million Americans. “If 50% of these people become Kuiper/Verizon customers and assuming Verizon’s phone ARPU [average revenue per user] of ~$60, there could be $2.4 billion in annual revenue,” they wrote.

Amazon and Verizon have previously teamed up to serve customers across many industries, including integrating Verizon’s 5G Edge MEC platform with AWS Wavelength and forming the Voice Interoperability Initiative. This collaboration builds on the relationship between the two companies, and lays the groundwork for Amazon and Verizon to serve additional consumer and global enterprise customers around the world.

Executives from Verizon and Amazon hinted that backhaul is only the start of the companies’ new partnership. They noted that Verizon’s plan to use Amazon’s LEO satellites is just the latest in a long line of pairings between the companies stretching from edge computing to private wireless networks.

“We’ve worked with Verizon on many complex projects over the years,” Amazon SVP David Limp said during a keynote presentation at MWC LA. Limp said Amazon continues to design and build its LEO satellites at the company’s Redmond, Washington, offices.

Verizon’s Chief Strategy Officer Rima Qureshi suggested Amazon and Verizon would explore other offerings beyond cell-site backhaul in the future. She said the companies would pursue “joint solutions” for large enterprise customers in industries stretching from agriculture to energy to education. She also said Verizon and Amazon would look for opportunities both domestically and internationally.

Qureshi noted Verizon’s deal with Nokia to deploy a private 5G network for Southampton in the UK – the largest of the 21 Associated British Ports. She suggested an Amazon-powered satellite component to that offering could extend connectivity beyond the port and into the ocean.

A spokesman for Verizon told Bloomberg it’s a global partnership with Amazon and it’s open to exploring similar deals with other companies, but declined to comment on the finances of the deal.

5G wireless telco’s deals with LEO satellite companies:

This new alliance between Verizon and Project Kuiper comes six weeks after AT&T made a similar deal with LEO satellite operator OneWeb. Just like Verizon, AT&T said it would use that agreement LEO (OneWeb) satellites to extend its connectivity reach to hard-to-serve areas that fall outside of AT&T’s fiber footprint or are beyond the reach of AT&T’s cell towers. AT&T said it would use LEO technology to enhance connectivity when connecting to its enterprise, small and medium-sized business and government customers as well as hard-to-reach cell towers.

In January, KDDI in Japan said it would use Starlink – the LEO offering from Elon Musk’s SpaceX – to connect 1,200 of its remote cell towers with backhaul. KDDI said it would begin offering services under that new teaming as soon as next year.

However, Project Kuiper is way behind both Starlink and OneWeb in terms of satellite deployments. As noted by GeekWire, Starlink already counts 1,650 satellites in orbit (and around 100,000 users), while OneWeb’s constellation is now up to around 358 satellites. Amazon, meantime, has received FCC approvals for the operation of more than 3,000 LEO satellites but has yet to launch any of them. Amazon has committed $10 billion toward the construction of its Kuiper LEO satellite network.

References:

https://www.verizon.com/about/news/5g-leo-verizon-project-kuiper-team

https://www.lightreading.com/satellite/verizon-amazon-to-integrate-leo-satellites-with-5g/d/d-id/773056?

https://www.bloomberg.com/news/articles/2021-10-26/amazon-signs-satellite-pact-with-verizon-in-challenge-to-musk

To learn more about partnering with Amazon and the Project Kuiper team, email [email protected]

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Related Articles:

https://techblog.comsoc.org/2021/09/08/att-and-oneweb-satellite-access-for-business-in-remote-u-s-areas/

https://news.kddi.com/kddi/corporate/english/newsrelease/2021/09/13/5400.html

https://arxiv.org/ftp/arxiv/papers/2103/2103.09156.pdf

WSJ: U.S. Wireless Carriers Are Winning 5G Customers for the Wrong Reason

AT&T and Verizon’s heavy promotions lead to booming growth, but value of next-gen networks to users still unclear, by Dan Gallagher

Even before the country’s two largest wireless carriers reported strong quarterly results this week, Morgan Stanley (MS) had a bit of cold water to splash on those carriers.

The investment bank published the results of its ninth annual broadband and wireless survey on Monday. Among the findings were that only 4% of respondents cited “innovative technology” such as 5G as an important factor in their choice of service. That number was unchanged from the previous year’s survey—despite an unremitting onslaught of marketing from wireless carriers and device makers for the next-gen wireless standard.  [IEEE Techblog reported the results of the MS survey here]

That would appear inconsistent with the strong growth in wireless services reported by AT&T and Verizon VZ  this week. On Wednesday, Verizon reported adding 429,000 postpaid wireless subscribers during the third quarter, which is up 52% from the number added in the same period last year. On Thursday morning, AT&T said it added 928,000 such users to its rolls in the same period—up 44% from the same period last year and the highest number of net new additions in more than a decade of what are considered the industry’s most valuable base of customers.

The two carriers have been selling 5G hard over the past couple of years. That picked up significantly last fall, when Apple Inc. launched its first iPhones compatible with the next-generation wireless technology. Those phones have been in hot demand. Analysts estimate total iPhone sales jumped 25% to a record of 237 million units in Apple’s fiscal year that ended last month, according to consensus estimates on Visible Alpha. The 5G-compatible iPhone 12 and 13 models are expected to account for more than 80% of that number.

But customers appear to be driven more by old-fashion promotions than cutting-edge technology. AT&T, Verizon and T-Mobile —which reports its results on Nov. 2—offered heavy discounts last year for iPhone 12 models paired with new 5G plans. That appears to have continued with the newest crop; wireless analyst Craig Moffett of MoffettNathanson notes that “promotions tied to premium unlimited plans have gotten richer” with the introduction of the iPhone 13 family this year. Indeed, the Morgan Stanley survey found price to be the most compelling driver in choice of a wireless plan, with 44% of respondents citing it as their top factor.

That leaves 5G itself as an uncertain selling point—but one with some big bills attached. The major carriers bid up a total of around $95 billion earlier this year for wireless spectrum licenses auctioned off by the Federal Communications Commission, and Walter Piecyk of Lightshed Partners estimates that a new auction of 3.45 GHz spectrum that kicked off earlier this month will draw total bids of around $30 billion.

These high expenses, coupled with doubts over the consumer appeal of the technology, have helped make AT&T, Verizon and T-Mobile some of the worst-performing large-cap stocks in the S&P 500 this year. All three fell Thursday even after AT&T’s strong report, and they have averaged a decline of 11% so far this year compared with a 21% rise for the main index. This 5G call is still not clear.

Verizon 5G advertisement in New York. PHOTO: John Nacion of ZUMA PRESS 

(In the editor’s opinion, it should state “5G built WRONG”)

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Editor’s Opinion:

We’ve often referred to 5G as “the greatest tech train wreck of all time.”  That is because the technology (as it now exists) has over promised and under delivered.  The major problems for 5G are the following:

  1. No ITU recommendations/standard/guidelines or 3GPP implementation specs for 5G SA Core network. That leads to many different carrier implementations, prevents roaming and interoperability.  Indeed, <5% of 5G deployed networks are 5G SA.  Yet ALL the 5G features and benefits, (e.g. network slicing, automation, MEC, enhanced security, etc) depend on 5G SA core network which separates the data and control planes.
  2. URLLC (ultra high reliability, ultra low latency) as specified by ITU-R M.2150 (previously known as IMT 2020.specs) and 3GPP release 15 (URLLC is still not complete in 3GPP release 16) do not meet the minimum performance requirements as specified in ITU-R M.2410 +.
  3. No standard for terrestrial frequencies or frequency arrangements, in particular the three sets of mmWave frequencies approved at the WRC 19 conference.  Also, regulatory agencies like the FCC plan to license mmWave frequencies NOT approved by WRC 19 (e.g. 12 GHz).  That defeats the goal of global frequency harmonization/roaming.
  4.  Few demonstrated use cases other than Fixed Wireless Access (FWA) and massive machine to machine communication/Internet of Things (but even here URLLC (especially ultra high reliability) is needed.

+ Minimum URLLC requirements:

  • Latency:   <=1ms latency in the data plane and <=10ms latency in the control plane.
  • Reliability:  The minimum requirement for the reliability is 1-10−5 success probability of transmitting a layer 2 PDU (protocol data unit) of 32 bytes within 1 ms in channel quality of coverage edge for the Urban Macro-URLLC test environment, assuming small application data (e.g. 20 bytes application data + protocol overhead). Proponents are encouraged to consider larger packet sizes, e.g. layer 2 PDU size of up to 100 bytes.

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References:

https://www.wsj.com/articles/wireless-carriers-are-winning-5g-customers-for-the-wrong-reason-11634837502

https://techblog.comsoc.org/2021/10/20/morgan-stanley-finds-little-interest-in-5g-finlands-oulu-says-5g-wont-mature-till-2027/

https://techblog.comsoc.org/2021/10/20/morgan-stanley-finds-little-interest-in-5g-finlands-oulu-says-5g-wont-mature-till-2027/

https://techblog.comsoc.org/2021/10/21/1058476/

https://www.itu.int/dms_pub/itu-r/opb/rep/R-REP-M.2410-2017-PDF-E.pdf

Verizon broadband – a combination of FWA and Fios (but not so much pay TV)

Verizon today announced its earnings for the third quarter of 2021, with the company posting net income of $6.6 billion, operating revenue of $32.9 billion, and $1.55 in earnings per share.  Verizon now expects total wireless service revenue growth of around 4%, an increase to prior guidance of 3.5% to 4%. It’s earnings guidance was also revised upwards.  Verizon adjusted earnings per share of $5.35 to $5.40 is now forecast for the current quarter – an increase from its prior guidance of $5.25 to $5.35.

“We had a strong third quarter, delivering on our strategy and growing in multiple areas,” Verizon Chairman and CEO Hans Vestberg said in the earnings release.  “Our disciplined strategy execution demonstrated growth in 5G adoption, broadband subscribers and business applications. We are increasing our 2021 guidance, and we continue to expand our 4G LTE and 5G network leadership. We fully expect to have a strong finish to the year as we accelerate deployment of 5G to our customers across the country,” he added.

“Verizon reported another quarter of strong financial and operating performance,” Verizon Chief Financial Officer Matt Ellis said in the press release. “We are seeing strong demand for connectivity across our Consumer and Business segments as our Mix and Match and Business Unlimited value propositions, network quality and unique partnerships are resonating with both new and existing customers. We grew revenue in the quarter, achieved solid cash flow, completed the sale of Verizon Media and increased the dividend for a 15th consecutive year.”

The #1 wireless telco in the U.S. lost 68,000 net video subscribers from its Fios (FTTH/FTTP) service in the third quarter.  “The telecom giant has been shifting its video focus away from Fios TV to partnerships with third-party streaming services as it positions itself as a key distribution platform for them. For example, Verizon has a deal with The Walt Disney Co. for the Disney bundle, which gives customers with select Verizon wireless unlimited plans access to Disney streaming services Disney+, Hulu and ESPN+,” said the Hollywood Reporter.

During the quarter, Verizon sold off its Verizon Media unit, which consisted of formerly dominant tech brands like AOL and Yahoo. The unit was acquired by Apollo Global Management, although Verizon continues to hold a 10 percent stake.

Verizon reported 129,000 broadband net additions in the third quarter, comprised of Fios, DSL and FWA subscribers, during the quarter. Of those, there were 55,000 Fixed Wireless Access (FWA) subscriber adds , which was about 42% of the 129,000 total broadband net adds generated in the quarter.  Verizon FWA has a total of ~150,000 subscribers.

Source: Verizon Infographic from 3Q 2021 Earnings Report

Verizon CEO Hans Vestberg said during the earnings call, “We’re on track to meet our fixed wireless access household coverage targets with an expected 15 million homes passed by the end of the year between 4G and 5G. To date, 5G Home is in 57 markets and 4G LTE Home is in over 200 markets across all 50 states.”

Verizon first began offering 4G LTE Home in July 2020 and has really accelerated its rollout. The company has also rolled out 5G Home. Verizon executives on today’s earnings call noted that the FWA subscriber base is a mix of customers getting service from its 4G/LTE network and via Verizon’s 5G millimeter wave (mmWave) network. The company’s FWA base currently is a mix of residential and business customers, but did not break out that ratio. But they did note that there’s about a rough 50/50 split between FWA customers that are coming from Verizon’s existing base and from other service providers.  CFO Matt Ellis said Verizon’s FWA customers aren’t solely focused on rural areas, as Verizon is also seeing “good traction” with the product in urban and suburban areas.

Verizon now seems to favor FWA over Fios, probably because of significantly lower installation costs for the former. Yet the company is not giving up on Fios. “In addition to fixed wireless access, we’re pleased with the great performance of Fios and continue to grow the open-for-sale volumes within our footprint.”

Indeed, Fios Internet net adds were 104,000 in the quarter. The telco is increasing its Fios footprint, adding over 400,000 open-for-sale locations this year. One analyst noted that Verizon hasn’t talked about increasing its Fios brand within its ILEC for quite some time.

Chief Financial Officer Matt Ellis said, “On the Fios expansion, we see great opportunity. We have been investing in that for a number of years; maybe haven’t spoken about it quite as much. But it continues to be a very good growth driver for the business.”

The company reported that Fios revenue of $3.2 billion in the quarter was up 4.7% year over year, driven by continued growth in customers as well as Verizon’s effort to increase the value of each customer by encouraging them to step up in speed tiers.

“We remain focused on bringing in high-quality net adds,” said Elllis. “The mix and match pricing structure for both wireless and Fios provides opportunity to migrate customers to higher value tiers and bring in customers on higher value plans. Our strategy is focused on increasing the value we receive from every connection.”

Vestberg said, “Our strategy is becoming a national broadband provider with the best access to the tech for our customers, including Fios, fixed wireless access on 5G, on 4G, mmWave and C-band.”

In a research note to clients, analyst Craig Moffett discussed Verizon’s broadband business:

Verizon’s FiOS service continues to show strength, a product of both more aggressive pricing and a lessening drag from video as the video base shrinks. Notably, Verizon is also beginning to see some contribution from fixed wireless access.

  • FiOS internet subscriber gains of 104K were almost spot on with consensus. DSL losses
    remained relatively steady (-30K) despite the fact that the base of legacy DSL has been
    gradually depleted. Overall broadband net additions came in at 129K, which includes
    55K fixed wireless connections. The company reported that it had 150K fixed wireless
    broadband customers at the end of Q3. Wireline broadband net additions were strong,
    at 74K, but were still weaker than expected. Notably, the company has guided to an
    addition of 400K FiOS homes open for sale, the first meaningful expansion of homes
    available for sale in some time (note that “open for sale” does not necessarily equate to
    new build – particularly in New York, there has long been a large gap between homes
    already passed and homes open for sale – but it is likely that there is at least some new
    build here.
  • Like peers, Verizon is losing video subscribers (down 68K, a little worse than the 54K
    loss we had expected, and worse than the 62K loss a year ago despite a smaller
    denominator). Their decline rate of 7.2% is broadly in line with the rate of decline for the
    industry overall.

With respect to Verizon’s 5G strategy and competition (e.g. T-Mobile), Craig wrote:

As we creep up to the 5G epoch, we’re on the brink of a very different industry. Despite a relatively healthy third quarter report – albeit against relatively easy year ago comps – there are reasons for disquiet. A post-COVID service revenue growth recovery has already begun to slow, and incremental revenue streams from 5G are still uncertain. Industry structure, which once appeared to be getting better – we went from four to three with the merger of Sprint and T-Mobile – is now arguably getting worse, as we now arguably go from three to five with the emergence of hybrid MVNO/MNO networks from Cable and Dish.  Verizon is on the brink of a very different competitive position.

T-Mobile’s 5G network is increasingly viewed as better than Verizon’s for coverage, speed, and reliability. Verizon’s one-time bid for sustained superiority – millimeter wave “ultra-wideband” service – currently accounts for just one half of one percent of the time 5G users are connected.

Craig notes that Verizon’s initial gambit to retain network superiority in 5G was built on millimeter wave spectrum. The very limited propagation of millimeter wave spectrum, however, demands an incredibly dense wired backhaul network, at enormous cost, lest customers are simply out of range much of the time. Verizon is, anecdotally at least, well ahead of peers in network densification. Still, recent data (once again, from OpenSignal) suggests that, while 5G customers of Verizon’s 5G service are connected to mmWave spectrum much more often than are 5G customers of AT&T or T-Mobile, that is still too trivial a percentage of the time (one half of one percent). That’s hardly the basis of an advantaged network.

T-Mobile has an advantage in both spectrum propagation (coverage) and spectrum depth (speed). And Verizon still charges a premium. Retention and growth will be harder in a world where their network superiority has been ceded to a lower priced service.

In conclusion, Craig states that Verizon enjoyed years as the best network, but it will be harder to maintain that claim in the 5G era, where T-Mobile has a coverage and spectrum depth (speed) advantage. And where TMobile and the company’s Cable MVNO partners charge meaningfully lower prices than Verizon does for the same or better service.

Verizon’s Year End 2021 Priorities:
• Expand 5G leadership (?) and drive adoption; mmWave deployment and C-Band launch
• Customer differentiation and scaling premium experiences
• Transform the business; Tracfone acquisition and Verizon Media Group sale
• Accelerate and amplify 5 vectors of growth; Network-as-a-Service strategy

References:

https://www.hollywoodreporter.com/business/business-news/verizon-pay-tv-subscribers-loss-broadband-users-grow-1235032891/

https://www.fiercetelecom.com/operators/verizon-adds-129-000-wireline-and-fixed-wireless-subs-q3-2021

https://www.lightreading.com/5g/verizon-has-150000-fixed-wireless-access-subs-/d/d-id/772925?

https://www.slashgear.com/verizon-5g-home-internet-expands-to-cover-more-cable-cutters-07694326/

Verizon starts private 5G mobile edge services with Microsoft Azure cloud

Verizon announced the availability of an on-premises, private edge compute service with Microsoft Azure, building on their collaboration formed last year. Verizon 5G Edge with Microsoft Azure Stack Edge is a cloud computing platform that brings compute and storage services to the edge of the network at the customer premises. This should provide enterprises with increased efficiencies, higher levels of security, and the low lag and high bandwidth needed for applications involving computer vision, augmented and virtual reality, and machine learning, Verizon said.  Here are the highlights:

  • Through its relationship with Microsoft, Verizon is now offering businesses an on-premises, private edge compute solution that enables the ultra-low latency needed to deploy real-time enterprise applications.
  • Solution leverages Verizon 5G Edge with Microsoft Azure Stack Edge to bring compute and storage services to the edge of the network at the customer premises, providing increased efficiencies, higher levels of security, and the low lag and high bandwidth needed for applications involving computer vision, augmented and virtual reality, and machine learning. 
  • Ice Mobility has used Verizon 5G Edge with Microsoft Azure to help with computer vision-assisted product packing to improve on-site quality assurance. The company is now exploring additional 5G Edge applications that provide tangible, material automation enhancements to its business, such as near real-time activity-based costing.

Some of the applications possible with the on-site 5G and edge computing include in-shop information processing in near real time to help retailers manage inventory, or factory data processing and analytics to minimize downtime and gain visibility across manufacturing processes.

Logistics company Ice Mobility has used Verizon 5G Edge with Azure Stack Edge to help with computer vision-assisted product packing to improve on-site quality assurance. The company is exploring additional 5G applications that leverage initial computer vision and 5G edge investments to provide automation enhancements, such as near real-time activity-based costing. This would allow the company to assign overhead and indirect costs to specific customer accounts, pick and pack lines, and warehouse activities to enhance efficiencies and improve competitiveness.

“This announcement aligns with IDC’s view that an on-premises, private 5G edge compute deployment model will spur the growth of compelling 4th generation industrial use cases,” said Ghassan Abdo, Research VP at IDC. “This partnership is a positive development as it leverages the technology and communications leadership of both companies.”

“Our partnership with Microsoft brings 5G Edge to enterprises, dropping latency at the edge, helping critical, performance-impacting applications respond more quickly and efficiently,” said Sampath Sowmyanarayan, Chief Revenue Officer of Verizon Business. “5G is ushering in next-generation business applications, from core connectivity to real-time edge compute and new applications and solutions that take advantage of AI transforming nearly every industry.”

“Business innovation demands powerful technology solutions and central to this is the intersection between the network and edge” said Yousef Khalidi, corporate vice president Azure for Operators at Microsoft. “Through our partnership with Verizon, we are providing customers with powerful compute and storage service capabilities at the edge of customers’ networks, enabling robust application experiences with increased security.”

Verizon offers a similar service with Amazon Web Services (AWS which provides private multi-access edge computing (Private MEC) for enterprises. Private MEC integrates edge computing infrastructure with private networks deployed on or near the customer’s premises.

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References:

https://www.verizon.com/about/node/921923

Watch this video to learn more about how Ice Mobility is using Verizon 5G Edge. Learn more information about Verizon 5G Edge and Verizon’s 5G technology

https://www.telecompaper.com/news/verizon-starts-on-site-5g-edge-services-for-azure-private-cloud–1395486

Amazon AWS and Verizon Business Expand 5G Collaboration with Private MEC Solution

Verizon and Samsung Complete Fully Virtualized 5G Data Session on C-band Spectrum

Introduction:

Verizon and Samsung Electronics recently completed an end-to-end fully virtualized 5G data session over C-band spectrum in a live network environment. The new milestone was reached in preparation for its upcoming 5G Ultra Wideband expansion using its newly acquired C Band spectrum.

This trial used cloud-native end-to-end virtualization and Massive MIMO technology to optimize 5G performance on C-band spectrum.

“We have been driving the industry to large scale virtualization using the advanced architecture we have built into our network from the core to the far edge. This recent accomplishment paves the way for a more programmable, efficient, and scalable 5G network,” said Adam Koeppe, Senior Vice President of Technology Planning at Verizon. “Customers deserve more than mere access to 5G. They deserve 5G built with the highest, gold-standard engineering practices that have positioned Verizon as the most reliable industry leader for years.”

Virtualization Is Important for 5G Performance Optimization:

The trials, conducted over Verizon’s network (using C-band Special Temporary Authority granted to Verizon by the FCC) in Texas, Connecticut and Massachusetts, used Samsung’s fully virtualized RAN (vRAN) solution built on its own software stack and C-band 64T64R Massive MIMO radio in coordination with Verizon’s virtualized core. The trials achieved speeds commensurate with traditional hardware-based equipment

Virtualization is critical to delivering the services promised by advanced 5G networks. Key 5G use cases such as massive scale IOT solutions, more robust consumer devices and solutions, AR/VR, remote healthcare, autonomous robotics in manufacturing environments, and ubiquitous smart city solutions, will heavily rely on the programmability of virtualized networks.

Cloud native virtualized architecture leads to greater flexibility, faster delivery of services, greater scalability, and improved cost efficiency in networks, paving the way for wide-scale mobile edge computing and network slicing. This technology enables Verizon to rapidly respond to customers’ varied latency and computing needs. Virtualization will also lower the barrier to entry for new vendors in the ecosystem. New entrants will accelerate innovation, reduce operating costs, and lay the groundwork for flexible network and cloud infrastructure closer to the customer, eventually leading to single digit millisecond latency.

“We’re proud to mark another milestone following our first large-scale commercial 5G vRAN deployment for Verizon, which is currently servicing millions of users. This trial reinforces our commitment to helping operators evolve their advanced 5G networks,” said Junehee Lee, Executive Vice President and Head of R&D, Networks Business at Samsung Electronics. “This achievement represents our dedicated efforts in leading the transition to virtualization, and helping Verizon realize greater efficiency, scalability and flexibility. vRAN is a powerful enabler for network transformation, and we aim to continue leading this journey.”

Why Massive MIMO Is Important for 5G Performance Optimization:

Massive MIMO is an evolution in antenna arrays that uses a high number of transmitters which enables more possible signal paths between a device and a cell tower. It also reduces interference through beamforming, which directs the beam from the cell site directly to where the customer is resulting in higher and more consistent speeds for customers using apps and uploading and downloading files. This trial used Samsung’s C-band 64T64R Massive MIMO radios that support digital/dynamic beamforming, SU-MIMO, MU-MIMO and dual connectivity and carrier aggregation.

“Incorporating full, cloud-native virtualization, Massive MIMO and beamforming into our network design and deployment will result in so much more than our customers merely seeing a 5G icon on their devices. This is 5G service optimized for peak performance,” said Koeppe.

Today’s milestone follows Samsung’s recent announcement on expanding its vRAN capability to support mid-band Massive MIMO radios—a first for the industry. Samsung’s C-band Massive MIMO radio is part of a complete C-band solutions portfolio.

Verizon on Track To Deliver 5G Over C-band:

This virtualization work comes on the heels of other work to speed the expansion of 5G Ultra Wideband service using C-band spectrum including:

These combined efforts, along with ongoing lab and field trials to optimize 5G technology on C-band spectrum will allow Verizon to offer expanded mobility and broadband services to millions more consumers and businesses as soon as the spectrum is cleared.

In the first quarter of 2022, Verizon expects to put its new 5G C-band spectrum into service 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.

About Verizon Communications Inc.
Verizon Communications Inc. was formed on June 30, 2000 and is one of the world’s leading providers of technology, communications, information and entertainment products and services. Headquartered in New York City and with a presence around the world, Verizon generated revenues of $128.3 billion in 2020. The company offers data, video and voice services and solutions on its award-winning networks and platforms, delivering on customers’ demand for mobility, reliable network connectivity, security and control.

References:

https://news.samsung.com/global/verizon-and-samsung-complete-fully-virtualized-5g-data-session-on-c-band-spectrum

https://www.verizon.com/about/news/verizon-announces-c-band-auction-results

Verizon Exec on 4G/5G fiber backhaul, One Fiber initiative and 5G at Home

SourceVerizon Communications Inc. at Wells Fargo Virtual Media & Telco Day: 5G & Streaming & Beyond on June 07, 2021 TRANSCRIPT /

Verizon Executive VP and CTO Kyle Malady stated:  Right now we have about 1/3 of our cell sites and small cells on our own fiber asset (backhaul). And I think that’s — we like the owner’s economics of that. We also like the control of the network because we can maintain quality and reliability.

Wells Fargo Question:

Let’s talk about Verizon’s One Fiber project, where you’re building in more than 60 cities. Has that continued at its pace that it was at last year? Has it slowed down at all? And at what point is most of the network core already built and you’ve really flipped to more kind of success-based fiber CapEx once you get beyond the core build?

Kyle Malady’s Answer:

We’re getting there on the core build. I’d say maybe 80% there roughly. And now it’s more connecting in a lot of markets. It’s more connecting the cell sites into it and making what we call laterals. So building the fiber laterals to cell sites or what have you and connecting back to the core. So we got two or three more years left on our fiber build here. And then primarily, it will be just success-based builds.

Verizon launched its One Fiber initiative in 2016, unifying its fiber planning and purchasing for both wireless and wireline into a single program. It initially announced a six-year, $300 million project in Boston, eventually outlining ambitions to add fiber to more than 60 markets outside of its ILEC footprint.

Speaking in May 2019 during the Wireless Infrastructure Association’s Connectivity Expo, Verizon SVP Adam Koeppe said:

We’ve made a conscious effort to really pair our wireless engineering with a fiber engineering process and what that’s allowed us to do is pursue over 60 markets around the country. We’re going to actually be building fiber into the footprint and, you know, truthfully, serving our own needs if you will from a frontal and backhaul perspective. That’s a very integrated engineering process that creates tremendous synergy on our end and allows for very rapid deployment.

Regarding Verizon’s 5G Home (fixed wireless access or FWA) expansion, Malady said:

Now that we have millimeter wave and C-Band spectrum, I feel confident that we can do this. And I feel confident we can do this in a good way, a way that is consistent with the quality people have come to rely on Verizon for. So we’re going to engineer this right. We have enough spectrum to do it. And I’m excited about the possibilities for us from a — meeting customers where they want to be. And without this millimeter wave and C-Band, we couldn’t have been able to support this kind of use case.

Besides the consumer market for 5G Home, SMB seems to be kind of a no-brainer. If we make it easy to use, if we make it easy to buy and set up and utilize, people will probably figure out ways to use that we haven’t even thought of yet. So I do think it’s something that will be used across the board. You could use it (5G Home) at Wells Fargo. You could use them in ATMs. You can use the service for a whole host of things, if you make — if it’s easier to use, more reliable, good price point. So if the value is there, I think people will use it no matter kind of — no matter what segment of the economy they are in. So — but obviously, we’re a heavy Consumer company, and that’s where we’re going to start.

Malady added he expects Verizon’s fiber experience to give it a competitive edge in the FWA arms race with rivals like T-Mobile. “Having been in the FiOS game for a long time we understand what works, what doesn’t work, how to set things up, the customer support, all the different angles. So I do believe that having experience with FiOS is absolutely going to translate over to what we do with 5G Home.”

References:

Verizon Communications Inc. at Wells Fargo Virtual Media & Telco Day: 5G & Streaming & Beyond on June 07, 2021 / 1:30PM

For fiber and small cells, Verizon follows an ‘integrated engineering process’ (rcrwireless.com)

Verizon’s ‘One Fiber’ Scam for 5G Wireless: Did Verizon Fool the Public and Investors? | by bruce kushnick | Medium

 

Verizon: Private 5G market at $8B in 4 years

Verizon Business Chief Revenue Officer Sampath Sowmyanarayan said that the private 5G wireless market could be worth up to $8 billion within four years. “It’s the layers of services on top that creates a pretty compelling revenue case for us,” he added.  Kicking off the FierceWireless Private Wireless Networks Summit on Monday, Sowmyanarayan pegged the total addressable market (TAM) for private wireless at around $7 billion to $8 billion by 2025.

Verizon distinguishes between a private wireless network product and mobile edge compute (MEC) offerings, he noted, but likes it when both come together. That’s when “the full power of 5G” can be exploited, he said, with features like low power usage and high device density. Verizon has ambitions for both public and private MEC, in partnerships with Microsoft and AWS.

Asked about moving beyond just providing connectivity and driving new revenue streams with private wireless, he pointed to recurring services such as security, managed services, and running custom applications or IoT.

“The private network piece, very few can do it as well as us, but it’s the layers of services on top that creates a pretty compelling revenue case for us,” Sowmyanarayan said. “But more importantly use-cases for the customer.”

He acknowledged that typically with large customers there’s also a significant upfront piece to get the private network up and running. The private network is essentially a scaled down version of the macro network consisting of core, radio, and other elements at a local location. But afterwards the recurring services are attractive for both Verizon and private wireless customers who can then keep attention on their main business functions.

“They are able to look to a large partner to offload some of the complex work so they can focus on what their core is,” Sowmyanarayan noted, pointing to mines as an example.

Verizon also has a private wireless offering for international customers, which uses Nokia network equipment. The carrier recently signed its first European 5G private wireless deal with Associated British Ports (ABP) for the Port of Southampton in the U.K. Sowmyanarayan said the carrier is very excited about the ABP deal and categorized it as “a sign for things to come” for Verizon.

In the 1st Quarter of 2021, Verizon posted a loss of 170,000 monthly wireless subscribers. Analysts had predicted 82,100 new customers.  The top U.S. wireless carrier continues to see partnerships like its ones with Amazon.com Inc. and Corning Inc. as the best path to bring advanced 5G services from development to actual sales.

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References:

https://www.fiercewireless.com/private-wireless/verizon-chases-7-8b-private-wireless-market

https://www.fiercedigitaltechevents.com/private-wireless-networks-summit