Verizon’s top executives are downplaying the near-term impact of 5G and framing expectations around a somewhat bifurcated strategy that discerns big cities from small towns. Unlike AT&T and T-Mobile US, Verizon is placing less emphasis on its nationwide 5G coverage plans and remains guarded about the expansion of its 5G network. 

“The reason why we focused on the LTE to start is not because we don’t have a strategy and an execution plan for 5G nationwide, but I think it’s really important for customers to discover what is 5G and that there are differences,” said Ronan Dunne, executive vice president and group CEO of Verizon’s consumer business, at Oppenheimer’s annual technology investor conference. 

“Not all 5G is created equal, and that’s important to understand. Essentially the way the 5G standards were written the broader the bandwidth you have, the available spectrum bandwidth you have, the more of the features and capabilities of 5G you can enable,” he said. “We want to have both a coverage strategy and a capability strategy.”

The operator is investing more heavily in metropolitan areas now because the large majority of Verizon’s network traffic occurs in dense urban environments, Dunne explained. “From a population point of view, it’ll be significantly less than half of the customers, but from a data traffic point of view it’s significantly more than half,” he said. “When it comes to the ability to use 5G as a significant capacity enhancement there’s more of an opportunity to leverage that in the urban areas.”

The 5G experience in America’s biggest cities will also be quite different from what Verizon’s customers experience in less populated areas, Dunne added. Urban areas will benefit from millimeter wave spectrum, which travels short distances but also has the ability to deliver much higher capacity and speeds. High-band spectrum, however, is more cost prohibitive and difficult to justify in vast stretches of the country, he explained.

“While we can deploy and we will deploy a 5G nationwide offering, the lower down the spectrum tiers you go, the more that will approximate to a good 4G service,” Dunne said. 

“If somebody else is rushing to bring out 5G nationwide, it may be because they don’t actually have credible 4G LTE coverage in those areas to start with,” Dunne said. “Millimeter wave is giving you between 1 and 2 GB download speeds. The mid bands and lowers are giving you in the low hundreds, so it’s already very clear the distinction between the two.”

Verizon’s 5G Ultra Wideband service is now available in limited parts of nine U.S. cities and the operator has yet to make any public commitments beyond reaching coverage in 30 markets by the end of this year.

“We will have both nationwide coverage of 5G but we will also have millimeter wave in the majority of places where data is used and that will give us a differentiated proposition on an ongoing basis,” Dunne said. 

Amid its ongoing network upgrades, Verizon is also updating core aspects of its network to capitalize on new opportunities at the edge, Dunne added. “We’re a customer-oriented business, but we are a technology-enabled business. So one of the things that we’ve done is we’ve essentially integrated the core elements of our network with this idea of the intelligent edge network and that allows us to serve very effectively across either our wireline assets or our wireless assets a seamlessly capable network,” he said. 

“That also supports much more efficient deployment of capacity and capability going forward. Married to that is a network as a platform or network as a service strategy, which means that we’re not just simply deploying the network solely for the benefit of Verizon brand and services.” Verizon anticipates continued growth on the wholesale side of its business, including enterprise customers that are seeking new capabilities.

“We see very much the opportunity of using the size and scale of the network and the intelligence within the network to serve all of the segments, all of the addressable parts of the market,” he said.