Verizon entered 2022 with no mid-band 5G network and ended the first quarter with 113 million people covered by its C-band spectrum. The carrier also remains confident its deployment activities are on pace to allow it to reach 175 million people with mid-band 5G by 2023.

“As deployment continues and device penetration ramps, traffic on our Ultra Wideband is increasing rapidly,” CEO Hans Vestberg said on the company’s Q1 earnings call, referring to Verizon’s mid- and high-band 5G networks. 

“At the end of the first quarter, 14% of all traffic in urban areas was on 5G Ultra, the result of our combined millimeter-wave and mid-band spectrum. We saw a 35% increase in millimeter wave traffic between Q4 2021 and Q1 2022. C-band traffic grew 155% from the end of February to the end of March. Where C-band is deployed, 30% of our wireless traffic uses that spectrum,” he said, according to a Seeking Alpha transcript. 

Verizon’s mid-band 5G network covers 130 million people today, the company added.

Despite those rapid deployments and shifts in network traffic, Verizon’s grandiose plans for 5G have yet to materialize. Executives continued pointing to growth opportunities in mobile edge computing (MEC), private networks, IoT, and fixed wireless access, but the return on Verizon’s massive 5G investments remain elusive. 

“This is going to pay off big time in the next five to 10 years,” Vestberg said.

Verizon’s Q1 revenue jumped 2.1% from the year-ago period to nearly $35.6 billion. Profits slid 12.4% to $4.7 billion. 

“The world continues to transition toward increased connectivity and the telecommunications industry’s role in building our future has never been more vital,” Vestberg said.

The carrier continues to develop and plan for 5G revenue opportunities in enterprise with MEC and private 5G, and broadband delivered by fiber and fixed wireless access, he added.

Advanced capabilities for those services are still waiting for a 5G standalone (SA) core. Verizon last month, during its Investor Day 2022 event, reiterated plans to commercialize and start moving customers to its 5G core around the middle of this year.

Verizon previously pledged full commercialization of its 5G core in 2021, but it missed that deadline and pushed back to 2022.

However, wireless customers won’t gain access to SA mode on the 5G core until 2023, Bill Stone, Verizon’s VP of technology planning and development, said during a phone interview last month. “We’ll be moving customers onto the 5G core before that. They will remain non-standalone, meaning they’ll still have the 4G anchor” until SA capability is made available to mobile customers in 2023, he added.

Once Verizon has 5G SA capability, it will start to introduce network slicing, which unlocks multiple features including different levels of customized service for enterprise applications, according to Stone. “There are a number of different ways that the customization of service capabilities with 5G SA could come into play with the private network solutions” as well, he added.

“It’s also a gateway to [MEC]. We see private networks as the first step, and then very close after that the low-latency capabilities that you get with MEC will fit very nicely with that as well,” Stone explained.

Meanwhile, Verizon’s network investment costs are growing. Capex hit $5.8 billion during Q1, a $1.3 billion year-over-year increase, driven by $1.5 billion invested in C-band, CFO Matt Ellis said on the earnings call. 

Verizon executives also commented on the rising inflationary pressures that are impacting every person and industry. Those pressures built up toward the end of Q1 and Verizon expects that trend to continue, Ellis said. 

The carrier hasn’t noticed a significant impact from inflation on its results to date, but Ellis described energy-related costs for network operations and transportation, and labor costs as “major areas of exposure for us.”

Those costs “represent a meaningful portion of our direct cost structure and have the potential to drive additional expense pressure throughout the rest of the year. We also believe that the inflation we are seeing throughout the economy may alter both the consumer and business landscape,” he said.

Vestberg described the current rate of inflation as a 40-year high, noting “we don’t know how this will impact us, but clearly these are levels of inflation we have never seen before in the wireless industry.”