Verizon’s 5G story remains half baked, and the upshot hangs on its ability to achieve mid-band 5G deployment targets.

Until then, Verizon's 5G rides on millimeter-wave (mmWave) spectrum and dynamic spectrum sharing software that allowed the operator to deploy 5G service running concurrently with 4G LTE on previously held low-band spectrum.

Verizon’s next step involves a massive, nationwide undertaking to deploy 5G on its recently acquired C-band spectrum. CEO Hans Vestberg today said the operator is on track to meet its 5G infrastructure deployment goals this year, including the deployment of more than 14,000 mmWave sites and up to 8,000 mid-band sites.

“All the major equipment, radios, etcetera, that stuff’s already secured. It is in our warehouse,” he said during Verizon’s third-quarter 2021 earnings call. “With the opening of the C-band, we see great new opportunities” that will allow Verizon to “accelerate and amplify our business case on 5G.”

Meanwhile, Verizon’s early and all-in bet on mmWave spectrum remains a point of contention and concern. The high-band spectrum, which features higher speeds but a low coverage radius that requires radio densification, hasn’t helped Verizon maintain its domestically superior position on coverage, speed, and reliability, according to analysts at MoffettNathanson. 

Verizon’s 5G Ultra Wideband service “currently accounts for just one half of 1% of the time 5G users are connected,” the analysts wrote.

Vestberg maintains that Verizon’s continued expansion of 5G mmWave will allow it to carry at least 5% of its urban area traffic on mmWave by the end of this year. During the third quarter, in markets where Verizon has an established 5G mmWave footprint, at least 20% of customer traffic traveled over mmWave, according to Vestberg. 

Verizon continues to point to fixed wireless access and mobile edge computing as the most obvious and initial business opportunities for 5G insofar that both represent new revenue streams for the operator. 

The carrier ended Q3 with 11.6 million homes covered by fixed wireless access, and executives said it’s on pace to surpass 15 million households by year end. 5G deployments on mid-band spectrum, mmWave, and 4G LTE all contribute to Verizon’s fixed wireless access footprint, depending on the location. 

Vestberg also highlighted Verizon’s early start on mobile edge computing, which currently includes a public variant on Amazon Web Services, and a private, on-premises service with Microsoft Azure. 

Public mobile edge compute, private mobile edge compute, and private 5G networks comprise the three use cases identified by Verizon thus far, and all three are in the execution phase today, Vestberg said. 

“Of course it takes some time because we are actually creating a totally new market, and we’re actually alone in this market,” he said. “Nobody else in the world has launched mobile edge compute at this moment.” 

Verizon previously said it doesn’t expect to generate meaningful revenue from its edge service until 2022, but it’s identified a total addressable market of $1 billion for private edge compute by the end of 2022 and expects that to grow up to $10 billion by 2025.

Verizon banked almost $6.6 billion in net income on $32.9 billion in revenue during the quarter, reflecting a 45.5% year-over-year jump in profit and a 4.3% jump in revenue. Verizon generated almost $27.6 billion in services revenue  including nearly $16.9 billion from consumers and $7.7 billion from businesses.

Business service revenue from small to midsized businesses jumped 7.1% year over year to $2.9 billion, global enterprise revenue declined 1.7% to almost $2.6 billion, and public sector revenue slid 5.6% to $1.5 billion.

Despite the relatively stable growth Verizon reported during Q3, “there are reasons for disquiet,” analysts at MoffettNathanson concluded. Recovering rates of service revenue growth in the wake of the COVID-19 crisis are slowing, “incremental revenue streams from 5G are still uncertain,” and the emergence of cable providers paired with Dish Network’s pending 5G launch create a more difficult competitive landscape for Verizon, according to MoffettNathanson. 

“T-Mobile’s 5G network is increasingly viewed as better than Verizon’s for coverage, speed, and reliability,” the analysts wrote. 

Indeed, T-Mobile US remains the only U.S. nationwide carrier to deploy a 5G standalone core with a low-band 5G network covering at least 305 million people and a mid-band 5G network covering at least 165 million people. The carrier claims it’s on pace to push mid-band 5G network coverage to 200 million people before 2022.

Verizon previously pledged to cover 100 million people with mid-band 5G in 46 markets by March 2022.