Verizon hit a 5G coverage milestone ahead of schedule, remains confident on 5G-based fixed-wireless access (FWA) growth, but continues to be cautious on the uptake of its enterprise-focused private wireless and mobile edge compute (MEC) services.

Matt Ellis, CFO at Verizon, told an investor conference today that the operator was now covering 200 million potential customers with C-band spectrum powering its 5G network. The carrier hit that mark about a month ahead of schedule.

CEO Hans Vestberg had previously stated the carrier was also ahead of schedule to hit 250 million potential customers covered with its C-band spectrum by year-end. Ellis today added that Verizon has its C-band spectrum up and running in 76 markets, which is just a fraction of the 406 markets where the carrier acquired access to that spectrum in a government auction for $45 billion.

Verizon’s C-band spectrum sit in the 3.5 GHz band and is significant for the carrier’s 5G network as it represents a wide swath of open spectrum that can provide the capacity and speed expected of 5G services. That spectrum also offers solid propagation characteristics that allow Verizon to provide coverage to a good chunk of customers from a single tower. The carrier is currently using 60 megahertz of spectrum in that band, but will have access to up to 200 megahertz in some markets that will provide higher speeds and capacity.

Rival AT&T is also relying on that spectrum to boost the capacity and speed of its 5G network. The carrier has similar year-end coverage expectations.

T-Mobile US is relying on its deep 2.5 GHz spectrum for a similar 5G performance boost. The carrier has been more aggressive in its build out, touting 265 million potential customers covered at the beginning of this year, and plans to hit 300 million covered by year-end.

Verizon and AT&T Fixed Wireless Access Fight

Ellis during the investor conference also countered claims by rival AT&T that FWA is not a long-term broadband solution.

“We've had critics of fixed wireless since the day we started talking about it,” Ellis said during the Morgan Stanley Technology, Media, and Telecom Conference 2023. “Like it's a niche case product; won't be able to work at scale; it’s only for customers who don't have access to anything apart from DSL, or are in a rural area, or on the business side of food truck. … Every single time that those items have been put out we've knocked them down. It operates at scale; we've got over a million customers and growing. It's not just customers who were underserved before, we're taking customers from existing providers. I hear that people say we're gonna run against the wall here, but they're arguing with the best engineering team in the industry when they make those claims. We feel very good about the runway we have with fixed wireless on 5G technology with the amount of spectrum we have – that we'll have in place by the end of this year. There is there's still significant opportunity there.”

Verizon ended last year with 1.4 million FWA customers and plans to have up to five million subscribers by 2025.

AT&T has been more focused with its FWA plans.

CEO John Stankey noted during the carrier’s most recent earnings call that its FWA plans will be targeted at a specific market segment that does not interfere with its fiber plans and require a specific marketing approach.

“I don’t see its place long term in dense metropolitan areas, and I don’t see it in reasonably well-populated suburban areas. I don’t see the dynamic of that product, and I’ve been pretty clear about this. If I start to think about consumer behavior and demand of consumption, and I start to take those curves out over three years, I don’t see that as the optimal way to service a customer in the near term,” Stankey told investors.

Stankey also stated that the cost structure for FWA would require a different economic model.

“Mobile bits are going to be higher-value bits. They’re going to need to be engineered differently. They should sell at a premium because of the supply-and-demand dynamics on it,” Stankey said. “And I want to ensure that my mobile network is, in fact, delivering that premium solution on those mobile bets when they need to be provided. And it’s absolutely 100% there to do that.”

AT&T does offer a FWA product and previously stated that it served more than 130,000 FWA customers.

Jenifer Robertson, EVP and GM for mass markets at AT&T Communications, hinted during a media roundtable earlier this year that the carrier would have a refreshed FWA product in the market later this year. She said they “expect it to be competitive in the marketplace and certainly applicable to the target use cases that we’ve talked about all along.”

Private 5G, MEC Opportunities Brighten

Ellis did provide a ray of sunshine on Verizon’s private wireless and MEC services.

“Right at the back end of last year, we really started to see a little bit of a shift in the amount of deals that we were getting with some of our larger enterprise customers,” Ellis said, though he maintained the company line on the pace of those expectations.

“The pace of adoption is something [that’s] probably going to take a little longer than we'd like, but in terms of the scale of the opportunity, [we] still very much believe there is something significant there,” Ellis said. “For me, the question is more of when not if. It's absolutely going to be there.”

Vestberg earlier this year told an investor conference that private wireless and MEC uptake had been “a little bit slower in the beginning,” adding that this has been partly due to network radio availability challenges that have in turn impacted service and deployment pricing options.

“We need certain radio base stations for private networks, different price ranges. We need modems for certain things. You need more than the handset and the macro sites that is now in there,” Vestberg said at Citi’s 2023 Communications, Media, and Entertainment Conference. “We would now have offerings for cheaper private 5G networks with certain suppliers and more high level, high quality. We didn’t have this optionality, and that’s why we’re now sort of seeing that we’re actually meeting the customer demands of building private 5G networks.”

The carrier had previously predicted it would hit $2 billion in MEC and enterprise-related revenues by 2025.

Ellis’ latest commentary will be one of his last for the carrier as late last week he announced plans to leave Verizon effective May 1. That move was part of a broader executive shakeup announced my Vestberg that will see current leaders heading new operating divisions.

Ellis played down any concerns that the moves were linked to operational challenges, and reinforced Verizon’s full-year guidance.

“The start of the year has been in-line with – largely in-line with – how we expected,” Ellis said. “Obviously a large part of the year still to go but it's really about building on the momentum that we had in the back half of last year.”