Verizon CEO Hans Vestberg today defended the mobile operator’s decision to lean heavily on dynamic spectrum sharing (DSS) for its recently activated low-band 5G network, but he didn’t go so far as to admit the company had no other option. 

The carrier’s lack of unencumbered spectrum paired with its early and all-in bet on millimeter-wave (mmWave) spectrum for 5G left it with no choice but to turn to DSS to activate a “nationwide” 5G network when Apple’s first iPhone that supports 5G was released in October. The technology, which allows operators to use the same spectrum bands for simultaneous use on 4G LTE and 5G, “was the tip of the iceberg” for Verizon’s nationwide 5G strategy, Vestberg said today at the UBS Global TMT Virtual Conference.

DSS allowed Verizon to activate a less-than-stellar 5G network that reaches more than 200 million people across more than 1,800 U.S. cities and towns. The performance of that network has been criticized by analysts and customers who expect more from 5G, particularly after Verizon spent the better part of the last two years highlighting its 5G Ultra Wideband network that delivers average speeds ranked among the best in the world, and the fastest in the U.S.

Verizon’s 5G network running on low-band spectrum shared with its 4G LTE network is “performing as we expected, on par or better than our 4G,” Vestberg said.

“Yes,” he admitted, “there are some losses when it comes to utilization, but the important thing is that’s nothing that a customer sees” because “we have already built even more capacity in the network at the same time.”

Vestberg said he is confident that DSS will continue to improve and Verizon plans to cover more customers with 5G by using the technology in the weeks and months ahead. “We feel good about it together with Ultra Wideband,” he said. 

Verizon’s marquee 5G network, which rides on mmWave spectrum, is available in parts of 57 U.S. cities today and the operator is on target to reach 60 cities by the end of the year. That achievement, and an expansion of its footprint in those cities, is due in large part to Verizon’s ability to deploy at least five times as many mmWave radios this year compared to 2019, despite the ongoing difficulties posed by the COVID-19 global pandemic, Vestberg said. He described the two distinct flavors of 5G as a long-term strategic play for the operator.

The contrasts between the two networks — one that is widely available but delivers lackluster performance, and another that suffers from extremely limited availability but can transmit speeds up to 4 Gb/s — could not be more stark. No operator executive wants to describe their respective 5G network, regardless of its makeup, as “on par or better” than 4G LTE, but that’s where things stand today.

Separate, but firmly anchored to Verizon’s 5G network deployments, is the operator’s burgeoning investment in mobile edge computing. And there again, it’s assembling at least two distinct offerings with hyperscalers because Verizon has no plans to build cloud software internally, Vestberg explained.

“There are two different offerings when you bring the 5G mobile edge compute to the market,” he said. “One is the public one, that’s what we’ve announced and launched with Amazon. That means that if you’re a developer you develop into the 5G mobile edge compute where we have our radio together with the cloud software from Amazon that they have built specifically for this.”

That service, which rides shotgun with Amazon Web Services (AWS’) Wavelength edge compute service, is now available in eight U.S. cities and the operator says it will reach two more markets later this month. 

“In Verizon’s case, we get a revenue cut every time you use the mobile edge compute,” Vestberg said, describing the realization of that revenue based on a similar pay-per-use framework that AWS applies to its cloud business.

Verizon’s second iteration of mobile edge computing is based on private 5G networks. “That’s where we build the private 5G network for a confined area. It might be a factory, it could be a distribution center, it could be a big retail store where you want to keep the data and all the traffic and have super great capacity and security,” he explained. 

“That’s much more like an enterprise solution. You create partners, software, applications, and you solve it, and that’s where we are now developing that with Microsoft,” Vestberg said, calling the enterprise play a long-term opportunity. “This is the next step for [enterprises] when they transform the factory or the retailer or the warehouse, when they do that by having 5G and substituting WiFi for example. That takes some time, but they’re going to be more agile, more secure, and have much better performance on their private 5G mobile edge compute network.”

Both flavors of mobile edge compute will lead to completely new sources of revenue for Verizon, but the operator doesn’t expect to realize meaningful revenues from mobile edge compute until 2022, according to Vestberg. The continued decline of Verizon’s legacy networks will eventually be offset and superseded by its investments in 5G mobile edge compute, he said.