Verizon Q1 earnings beat; loses postpaid phone & Fios TV subs, adds Fios internet subs; 5G & fiber build-out on track
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.
……………………………………………………………………………………………………………
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
…………………………………………………………………………………………………………………………………………………………….
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.
…………………………………………………………………………………………………………………………………………………………….
References:
https://www.verizon.com/about/investors/quarterly-reports/1q-2020-earnings-conference-call-webcast
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 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.
……………………………………………………………………………………………………………
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
…………………………………………………………………………………………………………………………………………………………….
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.
…………………………………………………………………………………………………………………………………………………………….
References:
https://www.verizon.com/about/investors/quarterly-reports/1q-2020-earnings-conference-call-webcast
https://www.wsj.com/articles/verizons-wireless-business-slowed-by-coronavirus-11587730044
FCC to open up 6 GHz band for unlicensed use – boon for WiFi 6 (IEEE 802.11ax)
The Federal Communications Commission (FCC) voted unanimously today to open up all of the 6 GHz band for unlicensed use, creating a new range of 1,200 MHz in the 5.925–7.125 (6 GHz) band for Wi-Fi services. This increases the amount of spectrum available for Wi-Fi by nearly a factor of five.
The 6 GHz band is currently used by microwave services such as wireless backhaul, utilities and public safety applications. Unlicensed devices will share this spectrum with the incumbent services under rules crafted to protect those licensed services, the FCC said.
The FCC’s decision authorizes indoor low-power operations over the full 1,200 MHz and standard-power devices in 850 MHz in the 6 GHz band. An automated frequency coordination system will prevent standard power access points from operating where they could cause interference to incumbent services.
In 850 MHz of the band, the FCC will allow standard power unlicensed use under an automated frequency control (AFC) system to protect incumbent users. The entire band can be used for indoor unlicensed use at very low power without AFC, and the FCC is proposing a new class of devices that can operate indoors and outdoors across the entire band.
Unlicensed WiFi Forward has said that opening up the GHz band. combined with the FCC’s plan to free up 5.9 GHz spectrum, also for unlicensed WiFi, will add at least $183.44 billion to the U.S. economy over the next five years.
Cable operators supported the proposal, while broadcasters argued for protecting the electronic news gathering (ENG) already using the band by reserving 80 MHz for them, saying there was too much risk of harmful interference to that even-more-crucial service in a time of pandemic.
- FCC commissioner Michael O’Rielly called it “a fantastic day for unlicensed services and the millions of Americans who use them.” He said that other than the 5.9 GHz slice, no other spectrum provided as great an opportunity given its proximity to the 5 GHz band that currently carries most of the WiFi load. He strongly disagreed with those who said unlicensed didn’t need the entire band. In addition to broadcasters wanting a sliver reserved for ENG, wireless companies had suggested auctioning some of the upper portion of the band for licensed use. “Today’s action is also very timely, as the COVID-19 pandemic has demonstrated the importance of our WiFi systems in keeping those in isolation connected to the outside world,” he said.
- FCC chairman Ajit Pai noted the pandemic had changed nearly every aspect of daily lives, with WiFi allowing for distance learning and virtual telehealth, and “stream Tiger King on Netflix.” Pai said it was a bold step to increase the supply of WiFi spectrum, increasing midband spectrum for unlicensed by almost a factor of five. He said the item would help promote IoT but also insure incumbents are protected from harmful interference.
- FCC commissioner Brendan Carr said that the pandemic may give a sense of what trasnformative innovations freeing up that spectrum could unleash, including two-way video connections to help students and teachers interact or virtual reality shopping from the safety of home.
- FCC commissioner Jessica Rosenworcel said the pandemic has ushered in remote work as never before, and WiFi has never been more important. “[W]ith this decision on unlicensed spectrum we do well by the law, we add more permissionless airwaves to the wireless economy, and we expand the democratizing force of having more WiFi in more places,” she said, adding an “amen.”
- “Even for those who can’t afford the new equipment that will take advantage of the new spectrum and the latest iteration of WiFi, speeds for their devices should increase as existing WiFi traffic moves to the new spectrum,” said commissioner Geoffrey Starks. “Low-income consumers purchasing discounted broadband plans will realize the full benefits of their subscriptions, as the WiFi channels within their homes become less congested and data flows more freely. The new spectrum is also expected to spur new efforts by many broadband providers, retailers, restaurants, and others that offer free public WiFi access at hotspots across the nation.”
“Today the U.S. Federal Communications Commission forever altered the future of WiFi. Thanks to their action, a new generation of innovation is now possible,” said Scott Harwell, SVP at Cisco. “With today’s vote, the FCC authorized 1200 MHz of 6 GHz spectrum to be opened for indoor WiFi use. This is a bold action, taken with deep knowledge of both the technology trajectory of WiFi and demand from consumers and businesses alike. Bold action is needed, as we are all discovering as we work from home, learn from home, and play at home – and stream more video than ever before. Those of us who helped build WiFi and who are responsible for its future send congratulations and thanks to the FCC. We promise to make good use of this resource.”
………………………………………………………………………………………………………………………………………………………………….
The industry group has given equipment working in the 6 GHz band the designation Wi-Fi 6E (IEEE 802.11ax) and expects to have the first such devices certified in early 2021. The alliance said its members have been quick to embrace the new band, with initial forecasts expecting more than 316 million Wi-Fi 6E devices will enter the market next year.
The FCC also opened a consultation on a proposal to permit very low-power devices to operate across the 6 GHz band, in order to support high data rate applications such as wearables and mixed reality devices. The notice also seeks comment on increasing the power at which low-power indoor access points may operate.
………………………………………………………………………………………………………………………………………………………………….
References:
https://www.fcc.gov/document/fcc-opens-6-ghz-band-wi-fi-and-other-unlicensed-uses
https://www.multichannel.com/news/fcc-opens-all-of-6-ghz-band-for-unlicensed
https://www.digitaltrends.com/computing/what-is-wi-fi-6/
…………………………………………………………………………………………………………………………
Nov 3, 2022 Update:
The Federal Communications Commission has approved 13 spectrum coordination systems that will allow for the testing of unlicensed devices on the 6 GHz band to limit interference.
In April 2020, the FCC approved the opening of the 6 GHz band to Wi-Fi and other unlicensed uses, including the next generation Wi-Fi 6E to allow for greater speeds and coverage. More Americans during the pandemic were using Wi-Fi at home, which created constraints on the network.
On Thursday, the agency approved the mechanism for which to test a slice of the 6 GHz band for unlicensed devices, including approving 13 proposed automated frequency coordination database systems from companies Broadcom, Google, Comsearch, Sony Group, Kyrio, Key Bridge Wireless, Nokia Innovations, Federated Wireless, Wireless Broadband Alliance, Wi-Fi Alliance, Qualcomm, Plume Design, and RED Technologies.
During this public trial phase, each company is required to make its system available for a specific period of time to provide an opportunity for the public to test their system’s functionality, the FCC said in a press release.
“American businesses and households rely on Wi-Fi for work, school, access to healthcare, and connecting with friends and family,” said FCC Chairwoman Jessica Rosenworcel. “We are moving forward on our plan to open doors for next generation, faster, better Wi-Fi – including Wi-Fi 6 E and laying the groundwork for Wi-Fi 7. This is good news and real progress” she said in the release.
This summer, the National Spectrum Management Association said it was concerned that the FCC opening of the 6 GHz band to unlicensed use – which held off a legal challenge – by a possible one billion portable devices was done without proper testing.
Indigenous American internet service provider Tribal Communications, in partnership with broadband funding platform Broadband.Money announced Wednesday the launch of a broadband toolkit to quantify the digital divide in tribal nations.
The FCC is creating a new broadband map of served and underserved areas, which is anticipated for release this month. Some of the data collected to create this map is provided by incumbent internet service providers, which critics have said have been known to misrepresent service availability in areas they allege to have coverage, including in tribal nations.
To accurately account the digital divide in tribal nations, the Tribal Community Broadband Kit will allow tribal entities to establish their own empirical connectivity data, according to the press release.
“While there are limited options to challenging the FCC on this issue, I believe the best course of action for Indian Country is to focus on creating data and guidelines to help states design fair and inclusive challenge processes. This would include speed testing at its core,” Joseph Valandra, senior vice president of Tribal Communications, said in the release.
AT&T Earnings Down; Cost Cutting & Lower CAPEX for Remainder of 2020, 5G Uncertainty?
As expected, AT&T reported first quarter (Q1) 2020 revenues down 4.6 percent to $42.8 billion. The mega telco/media company continued to lose pay-TV subscribers while its WarnerMedia division suffered from the Covid-19 outbreak’s impact on the film and TV industry.
AT&T estimates the coronavirus pandemic reduced EPS 5 cents in the first quarter, which otherwise would have been in line with analyst expectations. Adjusted EPS fell to $0.84 from $0.86 a year ago, but would have increased to $0.89 without the extraordinary virus effect. The adjusted operating profit margin reached 21.2 percent in Q1, down slightly from 21.4 percent a year ago.
- Telecom business revenues were down 2.6 percent to $34.2 billion, while adjusted EBITDA rose 2.1 percent to $12.8 billion.
- AT&T Wireless grew service revenues 2.5 percent.
- Revenues continued lower at the Entertainment group as AT&T lost another 1.035 million pay-TV subscribers in the quarter.
- Mobile subscriber growth slowed to 27,000 postpaid net adds (+163,000 with phones), and the broadband base fell by another 73,000 customers in the three months.
Highlights from today’s AT&T earnings call transcript:
In Mobility, service revenue grew by 2.5% in the quarter. EBITDA of $7.8 billion grew by more than $500 million or 7%, and EBITDA margins expanded by 280 basis points. COVID did impact our top line revenue numbers in the quarter by about $200 million due to lower equipment and roaming revenues. Our subscriber counts for wireless, video and broadband this quarter exclude customers who we agreed not to terminate service for non-payment. For reporting purposes, we are treating those subscribers has disconnects. Even with that, our industry-leading network and FirstNet drove postpaid phone net adds of 163,000. Postpaid phone churn was down 6 basis points to 0.86% and our 5G deployment continues. We now cover more than 120 million people in 190 markets, and we expect we’ll be nationwide this summer.
In our Entertainment Group, cash generation remains a focus. We added 209,000 AT&T Fiber subscribers and now serve more than 4 million. We continue to drive ARPU growth in both video and IP broadband. In fact, premium video ARPU was up about 10% as we continue to focus on long-term value customers. We launched AT&T TV nationally late in the quarter and subscriber growth was in line with our expectations even with COVID impacts. Premium video net losses again improved sequentially.
Business Wireline performance was solid, with EBITDA and EBITDA margins remaining stable. Revenues were consistent with recent trends as declines in legacy products were partially offset by growth in strategic and managed services. Business Wireline continued to be an effective channel for our Mobility sales. Including wireless, total business revenues grew 1.7%.
………………………………………………………………………………………………………..
The negative coronavirus financial impact was palpable at WarnerMedia, which lost around $1 billion in revenue year-on-year and over $500 million in adjusted EBITDA. The unit suffered from the suspension of key events such as the NCAA basketball tournament and new cinema releases, a slowdown in advertising due to the reduced economic activity and a halt to most production activities.
Operating cash flow totaled $8.9 billion in the quarter, and capital expenditure (CAPEX) reached $5.8 billion, leaving free cash flow of USD 3.9 billion. Net debt was at about 2.6x EBITDA at the end of the quarter.
AT&T said its liquidity position and balance sheet remained strong and it had already adjusted capital spending plans and suspended its share buybacks. It will continue investing in critical growth areas like 5G, fiber broadband and HBO Max, while maintaining its dividend commitment and paying down debt,
AT&T President & COO John Stankey said during AT&T’s earnings call:
Our 5G deployment continues, although we continue to navigate workforce and permitting delays. We expect nationwide coverage this summer. We also continue to be opportunistic with our fiber build beyond the 14 million household locations we reach today.
Stankey said the operator would encourage customers to install their own equipment and would shift customers to its fiber network. He also said the operator would use artificial intelligence (AI) and other capabilities to reduce initial “truck rolls” (technician visits to customer locations) and to eliminate the need for a second visit.
“These efficiencies will enhance our ability to continue to invest in our key growth initiatives,” including HBO Max and 5G, Stankey said of AT&T’s cost-cutting program.
Regarding CAPEX, before the coronavirus pandemic, AT&T said it would spend around $20 billion on CAPEX throughout 2020, which is significantly lower than the $23 billion it spent in 2019 and the $22 billion that most Wall Street analysts had expected AT&T to spend in 2020. AT&T CEO Randall Stephenson gave mixed messages on CAPEX plans for the remainder of the year on today’s earnings call:
“It’s not just writing checks for CAPEX. There’s people out doing things,” he said, explaining that some technicians may not be able to visit cell sites due to the spread of COVID-19, while some local officials may not be able to issue cell site construction permits.
“While we have no intention of slowing down on 5G and fiber deployment, the reality is that a lot of it is not in our control,” Stephenson said. “So there’s probably going to be – relative to the targets we gave you in CAPEX – some downward proclivity on that number, just because of the logistical issues we’re running into.”
AT&T declined to provide any financial guidance for the remainder of 2020 due to the pandemic. The operator/media giant spent roughly $5 billion on CAPEX during its most recent quarter, slightly above some Wall Street estimates.
AT&T’s management said the company had begun a cost-cutting program that the operator hopes will trim $6 billion from its budget by 2023. The huge cost cutting effort may include layoffs. Stankey didn’t specifically mention that word, but instead said the operator would enact a “headcount rationalization,” a term that could include layoffs as well as reductions by not hiring replacements for workers who retire or leave. That program, he said, would reduce the operator’s labor expenses by 4%, or roughly $1.5 billion, by the end of 2020. He added that the reduction would target employees in AT&T’s call centers, management structures and distribution strategy. AT&T employed roughly 252,000 people at the end of September.
CEO Stephenson made the following illuminating comments during the call:
In Mobility, the most immediate impacts are the reduction of roaming revenues as well as a reduction in late fees. The waiving of late fees is a commitment to our customers during these difficult economic times and roaming should gradually increase as people start to travel more. The first quarter impact of these items was approximately $50 million, with virtually all of it in the second half of March. We’re augmenting our digital sales team to mitigate the impact of store closures on equipment and service revenues, but we’re still forecasting lower wireless gross adds and upgrades. In fact, equipment revenues were down nearly 25% year-over-year in March. As a result of COVID, we anticipate an increase in bad debt expense across the various businesses, and accordingly, have recorded a $250 million incremental reserve in anticipation of that.
In our Entertainment Group, we anticipate increases in premium TV subscriber cord-cutting as well as lower revenues from commercial locations such as hotels, bars, and restaurants. Labor unit costs will increase temporarily from the 20% boost in pay we’re providing our frontline employees.
At WarnerMedia, content production has been placed on hiatus. Theatrical releases have been postponed and we’re seeing lower advertising revenues and lower costs from sports rights. This crisis has shown the value of premium streaming entertainment and we anticipate strong demand for HBO Max when it launches next month.
Fiber and broadband are more important than ever and we saw a pickup in demand for both in the quarter. We’re also seeing higher demand for VPN bandwidth and security. We do expect a negative impact on small business, which makes up about 15% of our total business wireline revenues. A detailed schedule of the COVID impacts is included in our investor briefing.
………………………………………………………………………………………………………………………………………………………………..
Lightreading’s Mike Dano made the following comments on AT&T’s 5G deployments and CAPEX in a blog post:
One Wall Street analyst wondered if AT&T is moving its 5G goal posts slightly for 2020. Jennifer Fritzsche at Wells Fargo pointed out that AT&T executives now promise nationwide low band 5G by “summer” 2020. In contrast, during previous calls they had said the operator would reach that target by the “middle” of 2020.
AT&T’s low band 5G offering works on its 850MHz spectrum and doesn’t provide speeds that are much faster than its 4G LTE network. The operator also operates faster 5G services in millimeter wave (mmWave) spectrum in parts of roughly 30 cities, but AT&T executives have remained conspicuously silent on that effort.
Verizon, in contrast, has promised to expand its own mmWave 5G network to an additional 30 cities this year.
AT&T’s 2020 CAPEX warning, on its network in general and on 5G specifically, has been echoed by some other players in the industry.
“COVID-19 and actions taken by governments to slow down the spread are making our service delivery and supply harder due to lockdowns and travel restrictions in many countries,” Ericsson CEO Börje Ekholm said earlier on Wednesday. Ericsson sells 4G and 5G equipment to a wide range of global operators, including AT&T. “In addition, while we have seen no material effects on our demand situation, it is prudent to believe that the slowdown in the general economy may lead some operators to delay investment programs.”
Ekholm said some operators are accelerating their investments in 5G and 4G capacity, pointing to providers in China specifically. Those comments dovetail with concerns of a 5G slowdown in Europe, largely due to decisions by some officials there to delay 5G spectrum auctions.
“We’re having to understand better what will happen as we exit the COVID pandemic in terms of [5G] investment,” noted EXFO CEO Philippe Morin in response to a question about how the pandemic might affect US operators’ 5G spending, according to a transcript of his remarks. He made his comments during his company’s recent quarterly conference call with investors. EXFO sells network testing equipment, including for 5G, to mobile network operators globally.
“In certain other countries in Europe, we’ve seen actually some of the [5G] spectrum auctions to be delayed as the countries have to deal with the virus,” Morin continued. “So, we’re going to – this is part of the discussions we’re having and dialogs we are having with our customers to better understand how – once we emerge out of the crisis, how the investments and where are the priorities are going to be.”
Stephenson acknowledged that it’s “pretty difficult” to predict what’s going to happen next as Americans and the rest of the world fight COVID-19. He said the world’s smartest economists disagree about what’s going to happen in the next quarter, much less the rest of the year.
AT&T’s CFO John Stephens said that mobile service remains an essential expense to most people. “The last thing that people don’t want to pay is probably their cellphone bill,” he said.
Indeed, in its most recent quarter – which suffered from the initial effects of widespread stay-at-home orders – AT&T reported postpaid phone net customer additions of 163,000, ahead of most Wall Street expectations. AT&T executives said the operator’s mobility business would help bolster its troubled media operation.
“The bottom line here is that Mobility performed its role admirably in Q1,” wrote the analysts at Wall Street research firm MoffettNathanson of AT&T’s financial performance, in a note to investors Wednesday.
However, AT&T executives warned that if an economic recession deepens wireless users may look to reduce their spending by paying less for their service or holding onto an existing phone longer rather than upgrading to a new phone.
References:
https://www.lightreading.com/services/atandt-starts-$6b-cost-cutting-program/d/d-id/759075?
…………………………………………………………………………………………………………………………………….
UPDATE:
April 24 (Reuters) – AT&T Inc said Friday that Chief Operating Officer John Stankey will take over as chief executive officer, effective July 1. The announcement was made during AT&T’s annual meeting.
AT&T Earnings Down; Cost Cutting & Lower CAPEX for Remainder of 2020, 5G Uncertainty?
As expected, AT&T reported first quarter (Q1) 2020 revenues down 4.6 percent to $42.8 billion. The mega telco/media company continued to lose pay-TV subscribers while its WarnerMedia division suffered from the Covid-19 outbreak’s impact on the film and TV industry.
AT&T estimates the coronavirus pandemic reduced EPS 5 cents in the first quarter, which otherwise would have been in line with analyst expectations. Adjusted EPS fell to $0.84 from $0.86 a year ago, but would have increased to $0.89 without the extraordinary virus effect. The adjusted operating profit margin reached 21.2 percent in Q1, down slightly from 21.4 percent a year ago.
- Telecom business revenues were down 2.6 percent to $34.2 billion, while adjusted EBITDA rose 2.1 percent to $12.8 billion.
- AT&T Wireless grew service revenues 2.5 percent.
- Revenues continued lower at the Entertainment group as AT&T lost another 1.035 million pay-TV subscribers in the quarter.
- Mobile subscriber growth slowed to 27,000 postpaid net adds (+163,000 with phones), and the broadband base fell by another 73,000 customers in the three months.
Highlights from today’s AT&T earnings call transcript:
In Mobility, service revenue grew by 2.5% in the quarter. EBITDA of $7.8 billion grew by more than $500 million or 7%, and EBITDA margins expanded by 280 basis points. COVID did impact our top line revenue numbers in the quarter by about $200 million due to lower equipment and roaming revenues. Our subscriber counts for wireless, video and broadband this quarter exclude customers who we agreed not to terminate service for non-payment. For reporting purposes, we are treating those subscribers has disconnects. Even with that, our industry-leading network and FirstNet drove postpaid phone net adds of 163,000. Postpaid phone churn was down 6 basis points to 0.86% and our 5G deployment continues. We now cover more than 120 million people in 190 markets, and we expect we’ll be nationwide this summer.
In our Entertainment Group, cash generation remains a focus. We added 209,000 AT&T Fiber subscribers and now serve more than 4 million. We continue to drive ARPU growth in both video and IP broadband. In fact, premium video ARPU was up about 10% as we continue to focus on long-term value customers. We launched AT&T TV nationally late in the quarter and subscriber growth was in line with our expectations even with COVID impacts. Premium video net losses again improved sequentially.
Business Wireline performance was solid, with EBITDA and EBITDA margins remaining stable. Revenues were consistent with recent trends as declines in legacy products were partially offset by growth in strategic and managed services. Business Wireline continued to be an effective channel for our Mobility sales. Including wireless, total business revenues grew 1.7%.
………………………………………………………………………………………………………..
The negative coronavirus financial impact was palpable at WarnerMedia, which lost around $1 billion in revenue year-on-year and over $500 million in adjusted EBITDA. The unit suffered from the suspension of key events such as the NCAA basketball tournament and new cinema releases, a slowdown in advertising due to the reduced economic activity and a halt to most production activities.
Operating cash flow totaled $8.9 billion in the quarter, and capital expenditure (CAPEX) reached $5.8 billion, leaving free cash flow of USD 3.9 billion. Net debt was at about 2.6x EBITDA at the end of the quarter.
AT&T said its liquidity position and balance sheet remained strong and it had already adjusted capital spending plans and suspended its share buybacks. It will continue investing in critical growth areas like 5G, fiber broadband and HBO Max, while maintaining its dividend commitment and paying down debt,
AT&T President & COO John Stankey said during AT&T’s earnings call:
Our 5G deployment continues, although we continue to navigate workforce and permitting delays. We expect nationwide coverage this summer. We also continue to be opportunistic with our fiber build beyond the 14 million household locations we reach today.
Stankey said the operator would encourage customers to install their own equipment and would shift customers to its fiber network. He also said the operator would use artificial intelligence (AI) and other capabilities to reduce initial “truck rolls” (technician visits to customer locations) and to eliminate the need for a second visit.
“These efficiencies will enhance our ability to continue to invest in our key growth initiatives,” including HBO Max and 5G, Stankey said of AT&T’s cost-cutting program.
Regarding CAPEX, before the coronavirus pandemic, AT&T said it would spend around $20 billion on CAPEX throughout 2020, which is significantly lower than the $23 billion it spent in 2019 and the $22 billion that most Wall Street analysts had expected AT&T to spend in 2020. AT&T CEO Randall Stephenson gave mixed messages on CAPEX plans for the remainder of the year on today’s earnings call:
“It’s not just writing checks for CAPEX. There’s people out doing things,” he said, explaining that some technicians may not be able to visit cell sites due to the spread of COVID-19, while some local officials may not be able to issue cell site construction permits.
“While we have no intention of slowing down on 5G and fiber deployment, the reality is that a lot of it is not in our control,” Stephenson said. “So there’s probably going to be – relative to the targets we gave you in CAPEX – some downward proclivity on that number, just because of the logistical issues we’re running into.”
AT&T declined to provide any financial guidance for the remainder of 2020 due to the pandemic. The operator/media giant spent roughly $5 billion on CAPEX during its most recent quarter, slightly above some Wall Street estimates.
AT&T’s management said the company had begun a cost-cutting program that the operator hopes will trim $6 billion from its budget by 2023. The huge cost cutting effort may include layoffs. Stankey didn’t specifically mention that word, but instead said the operator would enact a “headcount rationalization,” a term that could include layoffs as well as reductions by not hiring replacements for workers who retire or leave. That program, he said, would reduce the operator’s labor expenses by 4%, or roughly $1.5 billion, by the end of 2020. He added that the reduction would target employees in AT&T’s call centers, management structures and distribution strategy. AT&T employed roughly 252,000 people at the end of September.
CEO Stephenson made the following illuminating comments during the call:
In Mobility, the most immediate impacts are the reduction of roaming revenues as well as a reduction in late fees. The waiving of late fees is a commitment to our customers during these difficult economic times and roaming should gradually increase as people start to travel more. The first quarter impact of these items was approximately $50 million, with virtually all of it in the second half of March. We’re augmenting our digital sales team to mitigate the impact of store closures on equipment and service revenues, but we’re still forecasting lower wireless gross adds and upgrades. In fact, equipment revenues were down nearly 25% year-over-year in March. As a result of COVID, we anticipate an increase in bad debt expense across the various businesses, and accordingly, have recorded a $250 million incremental reserve in anticipation of that.
In our Entertainment Group, we anticipate increases in premium TV subscriber cord-cutting as well as lower revenues from commercial locations such as hotels, bars, and restaurants. Labor unit costs will increase temporarily from the 20% boost in pay we’re providing our frontline employees.
At WarnerMedia, content production has been placed on hiatus. Theatrical releases have been postponed and we’re seeing lower advertising revenues and lower costs from sports rights. This crisis has shown the value of premium streaming entertainment and we anticipate strong demand for HBO Max when it launches next month.
Fiber and broadband are more important than ever and we saw a pickup in demand for both in the quarter. We’re also seeing higher demand for VPN bandwidth and security. We do expect a negative impact on small business, which makes up about 15% of our total business wireline revenues. A detailed schedule of the COVID impacts is included in our investor briefing.
………………………………………………………………………………………………………………………………………………………………..
Lightreading’s Mike Dano made the following comments on AT&T’s 5G deployments and CAPEX in a blog post:
One Wall Street analyst wondered if AT&T is moving its 5G goal posts slightly for 2020. Jennifer Fritzsche at Wells Fargo pointed out that AT&T executives now promise nationwide low band 5G by “summer” 2020. In contrast, during previous calls they had said the operator would reach that target by the “middle” of 2020.
AT&T’s low band 5G offering works on its 850MHz spectrum and doesn’t provide speeds that are much faster than its 4G LTE network. The operator also operates faster 5G services in millimeter wave (mmWave) spectrum in parts of roughly 30 cities, but AT&T executives have remained conspicuously silent on that effort.
Verizon, in contrast, has promised to expand its own mmWave 5G network to an additional 30 cities this year.
AT&T’s 2020 CAPEX warning, on its network in general and on 5G specifically, has been echoed by some other players in the industry.
“COVID-19 and actions taken by governments to slow down the spread are making our service delivery and supply harder due to lockdowns and travel restrictions in many countries,” Ericsson CEO Börje Ekholm said earlier on Wednesday. Ericsson sells 4G and 5G equipment to a wide range of global operators, including AT&T. “In addition, while we have seen no material effects on our demand situation, it is prudent to believe that the slowdown in the general economy may lead some operators to delay investment programs.”
Ekholm said some operators are accelerating their investments in 5G and 4G capacity, pointing to providers in China specifically. Those comments dovetail with concerns of a 5G slowdown in Europe, largely due to decisions by some officials there to delay 5G spectrum auctions.
“We’re having to understand better what will happen as we exit the COVID pandemic in terms of [5G] investment,” noted EXFO CEO Philippe Morin in response to a question about how the pandemic might affect US operators’ 5G spending, according to a transcript of his remarks. He made his comments during his company’s recent quarterly conference call with investors. EXFO sells network testing equipment, including for 5G, to mobile network operators globally.
“In certain other countries in Europe, we’ve seen actually some of the [5G] spectrum auctions to be delayed as the countries have to deal with the virus,” Morin continued. “So, we’re going to – this is part of the discussions we’re having and dialogs we are having with our customers to better understand how – once we emerge out of the crisis, how the investments and where are the priorities are going to be.”
Stephenson acknowledged that it’s “pretty difficult” to predict what’s going to happen next as Americans and the rest of the world fight COVID-19. He said the world’s smartest economists disagree about what’s going to happen in the next quarter, much less the rest of the year.
AT&T’s CFO John Stephens said that mobile service remains an essential expense to most people. “The last thing that people don’t want to pay is probably their cellphone bill,” he said.
Indeed, in its most recent quarter – which suffered from the initial effects of widespread stay-at-home orders – AT&T reported postpaid phone net customer additions of 163,000, ahead of most Wall Street expectations. AT&T executives said the operator’s mobility business would help bolster its troubled media operation.
“The bottom line here is that Mobility performed its role admirably in Q1,” wrote the analysts at Wall Street research firm MoffettNathanson of AT&T’s financial performance, in a note to investors Wednesday.
However, AT&T executives warned that if an economic recession deepens wireless users may look to reduce their spending by paying less for their service or holding onto an existing phone longer rather than upgrading to a new phone.
References:
https://www.lightreading.com/services/atandt-starts-$6b-cost-cutting-program/d/d-id/759075?
…………………………………………………………………………………………………………………………………….
UPDATE:
April 24 (Reuters) – AT&T Inc said Friday that Chief Operating Officer John Stankey will take over as chief executive officer, effective July 1. The announcement was made during AT&T’s annual meeting.
GSA: 95 different “5G” devices commercially available- a 41% increase in 1 month!
The Global mobile Suppliers Association (GSA) today reported that the number of commercially available 5G devices had increased by 41% in the last month. There are now 95 different 5G devices now commercially available out of over 280 announced devices. This demonstrates continued and significant growth since GSA’s last report in March, which recorded 253 announced devices, of which at least 67 were commercially available at that time.
Editor’s Note: We wonder if any of the announced “5G’ devices can operate on more than one network? With the exception of China and Korea where networks are coordinated by the central government, almost all other 5G networks use 3GPP Release 15 “5G NR” for the data plane (some use a proprietary protocol for data plane) and LTE infrastructure for everything else- signaling, mobile packet core (EPC), network management, etc. We don’t know of any 5G Stand Alone networks that have been commercially deployed. The situation won’t improve much when IMT 2020 is standardized as there will be three different data plane radios to chose from: 3GPP Release 15/16 5GNR, DECT/ETSI NR and Nufront NR.
…………………………………………………………………………………………………………………………………………………………………………..
‘‘In what is clearly a very challenging time globally with social distancing and fundamental changes to the way we work and live, connectivity has never been more critical,” commented Joe Barrett, President of GSA. “Around the world we are seeing mobile operators take unprecedented steps to support their subscribers and boost capacity, with 5G a vital part part of their immediate and future strategies. As this data shows, we’re also seeing the vendor community working hard to bring devices to market even quicker to support the rollout and expansion of new 5G services, with smartphones accounting for over 85% of the new commercially available devices recorded this month.
“Based on vendors’ statements, we can expect more than 35 additional announced devices to become commercially available before the end of June 2020,” Barrett continued. “At GSA we’ll will be tracking and reporting regularly on these 5G device launch announcements for the industry as we continue to take the temperature of the 5G ecosystem.”
Part of the GSA Analyser for Mobile Broadband Devices (GAMBoD) database, the GSA’s 5G device tracking reports global device launches across the 5G ecosystem and contains key details about device form factors, features and support for spectrum bands. Access to the GAMBoD database is only available to GSA Members and to GSA Associates subscribing to the service.
The April 2020 5G Ecosystem Report containing summary statistics can be downloaded for free from https://gsacom.com/paper/5g-devices-april-2020-global-ecosystem/
By mid-April 2020, GSA had identified:
• 16 announced form factors
• 81 vendors that had announced available or forthcoming 5G devices
• 283 announced devices (including regional variants, and phones that can be upgraded using a separate adapter, but excluding prototypes not expected to be commercialised and operator-branded devices that are essentially rebadged versions of other phones), including at least 95 that are commercially available:
o 108 phones (up 21 from mid-March), at least 64 of which are now commercially available (up 24 in a month). Includes three phones that are upgraded to offer 5G using an adapter.
o 79 CPE devices (indoor and outdoor, including two Verizon-spec compliant devices not meeting 3GPP 5G standards), at least 14 of which are now believed to be commercially available
o 47 modules
o 19 hotspots (including regional variants), at least nine of which are now commercially available
o 5 laptops (notebooks)
o 5 industrial grade CPE/routers/gateways
o 20 other devices (including drones, head mounted displays, robots, snap-on dongles/adapters, a switch, tablets, TVs, USB terminals/dongles/modems and a vending machine)
GSA also tracks spectrum band support of 5G devices and has identified spectrum support information for just over three-quarters of all announced devices. 70% of all announced 5G devices are identified as supporting sub-6 GHz spectrum bands while 29.3% are understood to support mmWave spectrum. Just 22.6% of all announced devices are known to support both mmWave and sub-6 GHz spectrum bands. The bands known to be most supported by all announced 5G devices are n78, n41, n79 and n77. In April the number of announced devices known to support band 78 has passed the 100 mark for the first time, reaching 103 devices.
About GSA:
GSA is the voice of the global mobile ecosystem representing companies engaged in the supply of infrastructure, semiconductors, test equipment, devices, applications and mobile support services. The organisation plays a central role in promoting 3GPP technology, advocating spectrum policies and stimulating IMT industry development. The association is a single source of information for industry reports and market intelligence
Huawei’s “resilient” Q1-2020 results and coronavirus commentary
Undaunted by the U.S. campaign to ban its network equipment and smart phones, Huawei reported results for the first quarter 2020 that were in line with expectations, despite the effects of the coronavirus pandemic. The company said its business is continuing to grow, albeit at a slower pace.
Revenue in the first quarter rose by about 1% to 182.2 billion yuan ($25.72 billion), vemart phones, China tech giant rsus a 39% growth posted a year ago. Its net profit margin over the period narrowed to 7.3% from about 8% a year ago. Huawei being a privately owned company did not disclose its net profits.
“The growth rate has slowed, but this is also a resilient performance in the face of both the entity list and the coronavirus we are facing at this moment,” Vice President Victor Zhang said in a statement on Tuesday.
This represents a significant slowdown from the 19 percent sales growth for 2019. The company earlier stated that 2020 would be a very difficult year, its first full year with U.S. sanctions. Along with the effects of the coronavirus outbreak, 2020 “will be the most difficult year” for Huawei, rotating chairman Eric Xu said.
As for the impact from the coronavirus pandemic, Zhang said it was difficult to gauge what that would be in the short or long term, as he presented the results from London rather than Huawei’s Shenzen base to mark 20 years of business in Europe.
The company provided enlightening comments on the coronavirus in its earlier referenced statement:
Networks are a lifeline for people from all walks of life during this public health crisis, so ensuring normal network operations is of paramount importance. Huawei is doing everything in its capabilities to help carriers ensure stable and secure network operations. Together, we are working to meet the network demand created by social distancing as people switch to telecommuting, distance education, and e-commerce for daily necessities.
Since the outbreak, Huawei and its partners have rapidly launched many 5G- and AI-powered medical applications. We are using our expertise in communications technologies to help fight the pandemic and save more lives. The AI-assisted coronavirus diagnosis solution cuts CT scan review times from 12 minutes down to 2, helping doctors improve their diagnostic efficiency. 5G-enabled remote video consultation helps mitigate shortages of frontline experts and increases the efficiency of diagnosis and treatment of critical patients. AI-powered thermal imaging devices can take temperatures, increasing the efficiency of infection prevention and control in public places. In addition, Huawei has been doing its best to get masks, test kits, and other protective supplies to the countries and organizations that need them.
A seed that survives the storm will sprout and then blossom. Even though it is impossible to know when the tides of this pandemic will turn, we at Huawei believe that this challenge will be overcome by standing together.
……………………………………………………………………………………………………………………………………………………………………
In March, Huawei reported financial results for 2019, recording a $12 billion revenue shortfall that it attributed to the entity listing, which effectively blacklisted Huawei and numerous affiliates by restricting sales of certain products from U.S. suppliers to the vendor.
Huawei’s consumer segment was particularly hit by the U.S restrictions in the second half of last year. As one of the world’s largest smartphone makers, Huawei was unable to access Google’s proprietary Android operating system and was forced to launch new devices without access to the popular Google Play store.
…………………………………………………………………………………………………………………………………………………………………………….
References:
https://www.huawei.com/en/press-events/news/2020/4/huawei-announces-q1-2020-business-results
China Mobile says COVID-19 effected Q1 2020 Results: Loss of 4M 4G subs, 31.7M 5G subs
China Mobile’s first quarter 2020 earnings report was somewhat disappointing, save for 5G. Revenues, earnings and profits all decreased for the first quarter as the world’s largest mobile operator felt the impact of the coronavirus outbreak in China.
The state owned telco lost 4 million customers which is < 1/2% of their customer base in the first quarter. There were 946 million total China Mobile subscribers at the end of March 2020.
Revenues fell 2%, to 181.3 billion Chinese yuan (US$25.6 billion), compared with the year-earlier period, while revenue from telecommunications services was RMB168.9 billion, up by 1.8% over the same period last year. Profit attributable to equity shareholders was RMB23.5 billion ($3.3 billion), down by 0.8% over the same period last year.
The company (referred to as “the Group”) addressed the impact of COVID-19 in their Q1 2020 earnings report:
COVID-19 posed an impact on the overall society and economy in the first quarter of 2020. The Group’s business development was no exception. In light of COVID-19, the Group has introduced “three safeguards” which endeavoured to provide reliable communications, maintain service continuity and step up comprehensive prevention and control measures. Leveraging the demand for informatization services brought about by measures to prevent and control COVID-19 and the resumption of work and production, the Group has also accelerated business transformation and upgrade.
The Group’s total number of mobile customers was around 946 million as at 31 March 2020. Among them, the numbers of 4G customers and 5G package customers were 752 million and 31.72 million, respectively. During the first quarter of the year, data traffic business maintained growth momentum with handset data traffic recording a year-on-year increase of 43.4% and handset data DOU (average handset data traffic per user per month) reaching 8.3GB. Total voice usage declined by 16.3% year on-year to 661.4 billion minutes, which was attributable to OTT substitution and COVID-19.
Buoyed by the rapid growth of corporate SMS, total SMS usage rose by 45.4% year-on-year. Mobile ARPU dropped by 6.7% year-on-year to RMB46.9 for the first quarter of the year and the decline rate has moderated compared to that of the previous year. As at 31 March 2020, the total number of wireline broadband customers was 191 million, with a net increase of 4.10 million for the first quarter of the year. Wireline broadband ARPU amounted to RMB31.3.
Amidst COVID-19, the Group’s telecommunications services revenue grew by 1.8% year on-year to RMB168.9 billion for the first quarter of 2020. Currently, measures to prevent and control COVID-19 are still underway and some impact may carry over.
The Group will continue to foster business transformation and upgrade and make an all-out effort to promote the coordinated development of the CHBN four major markets. It will also continue to optimize its revenue structure and strive to maintain growth in telecommunications services revenue for the full-year of 2020. The Group’s revenue from the sales of products and others went down by 34.9% year-on year to RMB12.4 billion for the first quarter of the year. The decline was mainly caused by contracted sales of handsets and IoT devices, amongst other products, due to COVID-19.
…………………………………………………………………………………………………………………………………………………………………………….
The figures seem to vindicate arguments that China Mobile will prove fairly resilient to COVID-19 as a critical lifeline to the wider world for people under lockdown/ shelter in place orders. While customer numbers fell in mobile, there was no decline at China Mobile’s fixed-line business, which picked up another 4 million broadband customers to finish March with 191 million in total. On the mobile side, usage of traditional voice services fell from 278 minutes per user each month in the final quarter of 2019 to just 234 minutes in the first quarter of 2020. Mobile data usage, though, rose from 7.1 to 8.3 gigabytes per month over the same period.
Largely due to China government incentives, China Mobile now claims nearly 32 million 5G customers, up from just 2.6 million in December 2019. Sustain that rate of growth and the operator would be on course for almost 120 million 5G customers by the end of this year. That may be difficult once China Mobile has attracted all the early 5G adopters. It will be interesting to see how soon the major improvements brought by 3GPP Release 16 (scheduled to be frozen in early July 2020) will be implemented by the Group’s network equipment vendors- principally Huawei and ZTE.
Key Insights From Bloomberg:
- The carrier, which has more than 940 million subscribers, may benefit in the months ahead as economic activity begins to return toward normal. The expansion of 5G coverage planned this year may also help lure subscribers to higher priced heavy-data plans.
- While the company is spending to expand 5G networks, it has also been maintaining dividend levels and had cash and bank deposits of about 317 billion yuan as of the end of last year.
- Attracting 5G subscribers is a key for growth as those users tend to spend more per month. The company had about 31.7 million 5G subscribers as of the end of March.
- While total subscribers fell in the first quarter, the carrier benefited from a slight rise in average revenue per user from the previous quarter as the introduction of 5G networks made it easier for users to play richer video games and use applications that consume more data.
Iian Morris, International Editor at Lightreading wrote in a blog post:
A challenge for the Group is to meet the investments required for 5G infrastructure. China Mobile has earmarked RMB100 billion ($14.1 billion) for capital expenditure on 5G in 2020, an increase of 317% on what it spent in 2019, according to market-research firm Omdia (owned by market research goliath Informa). Its plan is to add at least 250,000 5G base stations by the end of this year.
Meeting this commitment will be difficult as earnings and cash flow are squeezed by COVID-19. Just-published figures show that earnings before interest, tax, depreciation and amortization fell nearly 6% in the first quarter, to RMB68.5 billion ($9.7 billion), compared with the year-earlier period. Under government pressure to hit deployment targets, China Mobile may look to reduce costs in other parts of the business to offset the increase in spending on 5G. “The group will continue to develop new sources of revenue and identify ways to curtail expenses, while taking measures to reduce costs and enhance efficiency,” it says in its statement.
Hacking into headcount will be difficult if China Mobile is to avoid disruption to 5G buildout and sales and marketing activities. Nevertheless, the operator may be able to realize some cost savings through pruning of a workforce that numbered as many as 456,239 employees at the end of last year. While major US operators have slashed tens of thousands of roles in recent years, China Mobile seems to have been a lot more cautious on the jobs side: Its staff numbers have fallen less than 1% since the end of 2016.
The latest update on 5G will be a further concern for US officials already worried about falling behind China in the development and rollout of the new network technology. With at least 30 million 5G customers, China already has enough users of the service to spur the development of new commercial applications that might not be feasible in the old 4G world. That is exactly what the US does not want to hear.
References:
Ofcom EMF measurement results show 5G radiation well within safety limits/not harmful!
UK regulator Ofcom has published the latest spectrum measurement program results, including six additional 5G mobile sites. Ofcom initially published the results of electromagentic field (EMF) measurements at 16 UK sites following the launch of 5G in 2019. The latest report shows EMF levels at a total of 22 5G sites across 10 UK cities. In particular, Ofcom carried out measurements close to known 5G-enabled mobile phone base stations in 22 locations across England, Scotland, Wales and Northern Ireland.
The base stations Ofcom visited all support a range of mobile technologies in addition to 5G, including 2G, 3G and 4G. In all locations, the largest contribution to the measured levels comes from previous generations of mobile technology (2G, 3G, 4G).
The results show that emissions at every site were a small fraction of the levels included in international guidelines set by the International Commission on Non-Ionizing Radiation Protection (ICNIRP). The highest EMF measurement from 5G signals reached just 0.039 percent of the maximum reference level specified in the guidelines.
The measurements show some variation between the exposure levels measured at each location. This is likely to be due, at least in part, to differences in the position of the measurement probe relative to the base station at each location. Ofcom took all measurements in publicly accessible areas, and these areas were at varying distances to the mobile phone base station serving the area. In all cases however, the UK regulator sought to take measurements at locations with the highest signal strength near the base station.
‘Every device that communicates wirelessly needs spectrum – such as televisions, car key fobs, baby monitors, wireless microphones and satellites. Mobile phones use spectrum to connect to masts so people can make calls and access the internet.’ ‘Following the launch of 5G in the UK last year, we published the results of electromagnetic field (EMF) measurements at 16 UK sites, in February. We have continued to test since then and have now published an updated measurement report, which looks at 22 5G sites in 10 UK cities. ‘At every site, emissions were a small fraction of the levels included in international guidelines. These guidelines are set by the International Commission on Non-Ionizing Radiation Protection (ICNIRP).
The deployment of 5G networks and the take-up of 5G services in the UK is still at an early stage. Ofcom will therefore continue to undertake EMF measurements to monitor the overall trends in the long term. This will include repeat measurements at a number of the locations which we have already visited as well as measurements in new areas.
Ofcom said it will continue to publish the results of these measurements on their website as they become available.
…………………………………………………………………………………………………………………………………………………………….
AJW Comment:
These results should surely debunk the outrageous and unproven claims that 5G radiation is harmful to humans. Many similar measurements showing 5G emissions are not harmful have been ignored by anti-5G health evangelists.
References:
https://www.ofcom.org.uk/__data/assets/pdf_file/0015/190005/emf-test-summary.pdf
Ofcom destroys 5G conspiracy theory with blunt reality check
Dish’s 5G network plan may be delayed for years as a result of COVID-19
In August 2019, Dish Network Corporation agreed to pay $3.6 billion for spectrum and $1.4 billion for Sprint’s prepaid business, which serves 9.3 million customers nationwide. The wholesale agreement and prepaid divestitures would let Dish become a reseller in the near term, offering service to consumers over the T-Mobile/Sprint network. Upon completion of the Sprint/T-Mobile merger, Dish was to acquire 14 MHz of Sprint’s nationwide 800 MHz spectrum.
Dish also committed to building a 5G network as a precondition of T-Mobile’s acquisition of Sprint. Dish said its 5G network would cover 20% of the US population by 2022 and 70% by mid-2023. At the time, Dish founder and CEO Charlie Ergen stated that not building the 5G network would amount to “financial suicide, and we’re not suicidal.”
However, as the coronavirus pandemic sends tremors through the U.S. economy, Dish faces a hostile operating environment: the company continues to shed subscribers from its pay-TV business (which is now suffering from the loss of live sports); big banks have pulled back on loans; and Dish decided to cut staff to help weather the economic fallout of the pandemic.
The New York Post earlier reported that Ergen’s plans to build the country’s fourth nationwide wireless network by 2023 were being thrown into doubt, quoting a source saying there is no financing to build a new 5G wireless network.
Business Insider spoke with the president and CEO of NATE, Todd Schlekeway, who elaborated on the biggest challenges that the coronavirus poses for tower technicians:
“Number one: The PPE [Personal Protective Equipment] that they need is becoming very difficult to obtain from not only their normal supply channels, but [even] trying to go outside of those has been very difficult. Number two: Access to restaurants hasn’t been too big of an issue because a lot of places have drive-throughs, but some companies have narrowed their scope geographically during this pandemic … due to [limited access to] hotels. [This allows] their tower crews and their techs to come home every night, whereas before they may have been on the road a whole week. The logistics of sending a crew on the road is harder now because restrictions could be different between jurisdictions.”
These challenges will likely slow down and increase the costs of Dish’s plan to deploy 10,000 sites for its 5G network by 2022. Given Dish’s already questionable $10-billion budget for a complete network build-out, it appears improbable that Dish will reach its ambitious network build-out targets.
Though Dish will be hit hardest by the logistical challenges of performing telecom field work during the pandemic, we expect the impacts will be felt by the industry at large. Dish is in a particularly challenging position, as it must build a network from scratch in order to compete as a network operator once its seven-year MVNO deal with T-Mobile expires.
But the big three U.S. wireless carriers likewise have ambitious 5G network build-out plans. For example, the New T-Mobile intends to cover 99% of the U.S. with 5G within six years, as part of a plan that includes 10,000 new towers and 40,000 additional small cells.
As long as quarantine measures remain in effect, it will be more difficult for network operators to carry out extensive network upgrades. This presents a greater threat to the business strategies of would-be telco disruptors, as incumbents can fall back on their existing network capacity which doesn’t exist for the upstart wireless carriers like Dish.
Is Dish’s 5G network plan a pipe dream? NY Post infers it is:
NY Post composite photo
……………………………………………………………………………………………..
References:
https://www.businessinsider.com/dish-faces-challenges-with-5g-build-out-amid-coronavirus-2020-4
https://nypost.com/2020/04/12/ergens-wireless-network-plans-dim-amid-coronavirus-pandemic/