Verizon completed its pre-standard 5G fixed wireless trials that it conducted with friendly users in 11 markets across the country. The company is now shifting its focus to deploying its pre-standard fixed 5G in the three to five cities where it will launch commercial services later this year. One of those cities is Sacramento, California, but the rest are still unknown.
During the company’s first quarter earnings call with investors today, Verizon CFO Matt Ellis said that the company is in the process of “deploying 5G nodes on its assets” in those initial markets, which it will reveal closer to the launch. He also said that the company has successfully completed 5G data sessions in those launch markets using commercial equipment that will be deployed at launch. “The 5G ecosystem is progressing,” Ellis noted.
He reiterated that the initial launch will use pre-standard 5G gear. But he also said that Verizon will be able to quickly move to the standards-based 5G New Radio (NR) in 2019 as soon as manufacturers can make customer premises equipment (CPE) available. “We will do it as soon as its available,” he said.
Verizon’s 5G fixed wireless deployment will use the company’s 28 GHz and 39 GHz millimeter wave (mmWave) spectrum licenses that it obtained as part of its acquisition of XO Communications.
But Verizon isn’t the only one using fixed wireless. In a research report, ABI Research said that 5G fixed wireless is making headway in the U.S. thanks to Verizon and AT&T. The firm noted that even some of the cable companies like Charter Communications are experimenting with fixed wireless.
ABI estimates that global fixed wireless broadband market will grow 30 percent this year and will generate $18 billion in service revenue.
CapEx Not Accelerating
Interestingly, Ellis told investors that the company does not expect to see a big acceleration in CapEx to fund the company’s 5G rollout. Instead he touted the expansion of the company’s software-defined networking (SDN) and its edge networking (which it calls “Intelligent Edge”) as well as its densification of the existing 4G LTE network. He said all these item upgrades contribute to a more flexible network that can provide more capacity, higher throughput, and speed without requiring a lot more infrastructure. “It’s not the same as when we adopted 4G and went from CDMA to 4G,” Ellis said.
In a research note, TBR Research confirmed that Verizon is gaining a lot of network efficiencies from its adoption of virtualized technologies. “The efficiencies gained by Verizon’s adoption of virtualized network technologies, such as NFV and SDN, will be a main driver of the carrier’s goal of cutting $10 billion in operating costs by 2020,” TBR said.
The 1Q Metrics
Verizon’s first quarter consolidated operating revenues were $31.8 billion, an increase of 6.6 percent from the same quarter in the previous year. Net income was $4.7 billion in the quarter.
The company posted $1.11 in earnings per share, compared with 84 cents in the same quarter the previous year.
Verizon said that it has created a new group within the company called Verizon Connect that will include its Internet of Things (IoT) and telematics businesses. Total Verizon Connect revenues were $234 million for the quarter. The company said its IoT revenues, including Verizon Connect, increased 13 percent year-over-year.
Photo: Verizon’s headquarters in Basking Ridge, New Jersey.