Verizon hinted that its trials of fixed 5G service using the millimeter wave (mmWave) spectrum are progressing better than expected, and that the carrier is on track to deliver fixed 5G service in late 2018.
During the company’s third quarter 2017 earnings call with investors, Verizon EVP and CFO Matt Ellis said that Verizon will be providing more details on its fixed 5G trials this quarter but said that overall the company has been pleased with the performance of the mmWave spectrum. Specifically, he said that the company has discovered it can deliver service in a non-line-of-sight environment, something that many experts have thought not possible. In addition, Ellis said that Verizon also discovered that in multi-dwelling units, or buildings that are several stories high, it can deliver service to higher than 20 floors, which is more than the company thought possible.
Earlier this year Verizon said it planned to launch 5G fixed wireless trials with friendly users in 11 markets across the country using the 28 GHz mmWave spectrum licenses that it obtained as part of its acquisition of XO Communications. Ellis said that those trials are ongoing. “Nothing has changed in our effort to offer fixed wireless in late 2018,” he said.
Verizon distinguishes between fixed 5G and mobile 5G offerings. The company announced earlier this week that it will be collaborating with Qualcomm and Novatel Wireless on 5G New Radio (NR) trials based upon the 3GPP 5G NR specification that is expected to be released in December. The companies said they will initially focus on 5G NR in the 28 GHz and 39 GHz.
Ellis briefly addressed the announcement on the earnings call, saying the companies believe that mobile 5G will be available in 2019.
SDN, NFV Contribute to Lower Capex
Interestingly, Verizon also reported that its 2017 capital expenditure spending will be on the lower end of the projected $16.8 billion to $17.5 billion range the company provided to investors earlier this year. As of the end of the third quarter, Verizon’s capex spend was $11.3 billion.
Ellis attributed some of the lower spending to the benefits of software-defined networking (SDN) and network functions virtualization (NFV), noting that those technologies allow for the company to transition some hardware to software, which provides a cost savings.
Verizon also is embarking on a $10 billion cost reduction plan. CEO Lowell McAdam told investors at a Goldman Sachs conference in September the company plans to reduce spending by $10 billion in the next four years.
Ellis said the company is looking at all areas of the business to identify areas where Verizon can improve efficiency in its operations. He said it will share some specifics of that plan soon.
Other 3Q Metrics
Verizon reported third quarter consolidated operating revenue of $31.7 billion, an increase of 2.5 percent over the third quarter of 2016. The company also reported earnings per share of 89 cents and non-GAAP EPS of 98 cents.
Verizon also released some numbers about its Internet of Things (IoT) business. The company said its telematics revenues were more than $220 million in the quarter and organic IoT revenue increased 13 percent year-over-year.