Verizon CFO Matt Ellis

Verizon endured a rough operational second quarter and warned those choppy waters will continue for the rest of the year. That sentiment echoed one put forth by rival AT&T earlier this week.

Financially, Verizon reported flat Q2 revenues compared to the same quarter last year, which along with a slight uptick in expenses dropped net income more than 10% year over year. Management cited several factors, including increased recessionary concerns and an increasingly competitive market environment.

“This was a challenging quarter, and our results did not meet the expectations we have set for ourselves,” CFO Matt Ellis told investors during the carrier’s earnings call.

Unlike AT&T, Ellis said the carrier has not yet witnessed any customer payment delays.

“We haven't seen any noticeable change in the payment patterns from customers, continues to be very good, very much in line with what we were seeing pre-COVID, in fact slightly better than that time period,” Ellis said, hinting that the carrier had a higher “quality” of customer compared to rivals.

AT&T CFO Pascal Desroches earlier this week told investors that the carrier was bracing for a delay in consumers paying their bills due to surging recession concerns. He explained that “it’s taking about two more days than last year to collect customer receivables,” which resulted in a $1 billion impact in Q2, and that AT&T had around $130 million in higher bad debt expense.

Also, unlike AT&T, Verizon remains committed to its fixed-wireless access (FWA) business. The carrier added 186,000 FWA connections during the quarter and has been running an aggressive promotional offer to gain customers and is pushing to add the additional capacity and speed from its C-Band deployments.

AT&T, on the other hand, remains focused on using fiber to expand its broadband operations and support backhaul for its mobile 5G service.

Verizon ended the quarter with 135 million potential customers covered by its C-Band spectrum holdings compared with 113 million at the end of Q1. This spectrum is significant for Verizon as it will allow it to basically double the amount of capacity and increase speeds of its 5G network to customers. It was also a repeated talking point for both Ellis and CEO Hans Vestberg in attempting to paint a better picture going forward.

Verizon spent $4.7 billion on capex during Q2, including $1.3 billion on its C-Band buildout. That number was down from the $5.8 billion in total capex spent in Q1 and $1.5 billion in C-Band capex. The carrier reiterated its full-year capex of between $16.5 billion and $17.5 billion, with up to $6 billion more to be spent on its C-Band deployment.

Vestberg said the carrier remains on track to cover 175 million potential customers with C-Band by the end of the year. Verizon ended Q2 with 47% of its customer base holding 5G-capable devices and expects that to hit 60% by the end of the year.

Vestberg also continued to tout Verizon’s work with mobile edge compute (MEC) and private 5G wireless deployments. He touted the recent expansion of its MEC work with Amazon Web Services (AWS), which he claims means that 75% of the U.S. population is now within 150 miles of its 5G edge footprint. The carrier has also been scoring private 5G network deployment deals.

“We are the world leader in mobile edge compute and private 5G networks,” Vestberg said. “We feel that's the sweet spot for us. We've been all the time in very early with other 5G use cases as well and feel really good where we are.”

Looking ahead, Verizon lowered revenue expectations from being just flat to being down 1% for the full year.