Interview with Verizon's Ronan Dunne

Verizon’s EVP and CEO of its consumer group Ronan Dunne was interviewed by Fierce in March 2021. Dunne talked about Verizon's rollout of 5G, the deployment plans for its new C-band spectrum and its plans for fixed wireless access.

This transcript was lightly edited for brevity and clarity.

Fierce: What does 5G mean to the consumer at this point? Is there an aspect of 5G that customers are most interested in or do most people not really even understand what 5G is?

Dunne: I think it's a great question. We're really on the cusp of this stage. We have some early adopters who absolutely get it and understand the benefits of 5G. I'll give you an example — the gaming community. It's that low latency is really important for mobile gaming, but I think for the general population there is still an educational opportunity there to say what it's really about. And in that regard, 5G in my view is different from any previous G we've ever seen. It's not just an upgrade of speed, but it's a real upgrade of capability in a way that's different from the previous generations. And what I would highlight in sort of layman's terms is that we have different capabilities that can be separated and used in different ways. It allows us to have more connected devices in every square mile of network, but it also allows us to deliver incredible burst speeds or low latency. And the idea will be that over the next couple of years, what you'll see first in business, and then increasingly in consumer is you'll see new use cases. So we're right on the cusp of it's a really exciting opportunity. 

Fierce: Let's talk about Verizon's 5G deployment roadmap for 2021. You guys just had a big investor day. You talked a lot about C-band. You said that the company is going to be spending an additional $10 billion over three years just to help with all the C-band deployments. So, what work will be happening this year on deploying 5G? 

Dunne: So, two key things, the first is that all of the major handsets that are in the market today are now C-band compatible. We're already priming the pump in that regard. And we have 7 million C-band capable handsets in the network already during the course of the year in expectation of the arrival of the new C-band spectrum, which will actually arrive at the end of the year, the first tranche. And we will be building out cell sites to be ready, not building new cell sites, but upgrading existing cell sites in the first area that's available, which is the 46 PEAs or partial economic areas, which are the main urban areas in the continental USA. And so, we will be upgrading sites, power, antennas and new radio equipment to be ready for C-band. And then we'll launch at the end of this year in those first 46 markets. We expect to have potentially 75 million people covered by that launch.

And certainly by this time next year we’ll have 100 million people inside the C-band area. We've also built new CPE for homes so that our residential broadband offering can also be expanded. Currently, it's available using our millimeter wave 5G network, but we will expand that with C-band capability in our Ultra Wideband service. So again, at the end of the year, a dramatic increase in the number of homes for which a residential broadband fixed wireless access product will be available jumping from a couple of million under millimeter wave to about 15 million at the end of this year. 

Fierce: There was a little bit of controversy that flared up because Verizon says, or you just said, that you will not have to build or lease more cell sites to deploy C-band. But T-Mobile's Neville Ray says that you definitely will have to lease more cell towers for C band. So it sounds like you're not planning to do any more towers this year. Do you think that there might be more towers in the future? 

Dunne: Just for absolute clarity, we already have a network which is densified. And so, we have overlapping coverage in our urban areas. That's why we've been able to deliver superior network experience with actually less low- and mid-band spectrum than competitors. And that's why we win all the JD Power and other surveys. So, what we are doing is upgrading those sites. What I'm also doing, which we have a program that started about 18 months ago, is I'm building small cells, which support my millimeter wave deployment. We have about 15,000 of those that we will deploy in the course of 2021, which will mean that by the end of the year, we have more than 30,000 of those small cells. So, we're not building new macros. And in the medium term, in rural and semi-rural areas, we may take the opportunity to do some infill, but in the short term, in the dense urban areas, we have no incremental macro side requirements. 

Fierce: Are you seeing C-band as primarily more of a rural or suburban play, or is this crossing all of your footprint?

Dunne: It's going to be contiguous national coverage in C-band and very much complements the urban areas or millimeter wave holdings, because what we will be able to do is we'll be able to expand the capacity and the capability in the urban areas. So much of our traffic will be both indoor and outdoor. Millimeter wave is primarily for outdoor coverage. And for those special areas like stadiums, transport hubs, et cetera, the C-band with its different propagation characteristics will complement that outdoors, but also significantly increase the number of homes passed, where we will be able to open those for sale for residential broadband in the more semi-rural and rural areas. We had never had any plans to roll out millimeter wave in those areas other than spot deployments in relation to private networks for businesses or in retail environments or other places like that.

The C-band now gives us 200 megahertz, so mid-band spectrum on the global international standard that we can use nationwide. And what we have is there are 46 PEAs that I mentioned initially, but we have all 406 PEAs in the USA where we have spectrum. So, unlike anybody else's coverage, we will have one single contiguous coverage layer of mid-band spectrum without any gaps, without any parallel limitations.

Fierce: While we're talking about the 5G roadmap, does Verizon have an update on the standalone core that all of the carriers seem to have gone a little dark on. What's happening with the core?

Dunne: We are still committed to deploying a standalone core. And in large part it's a function of the availability of firstly, the upgrades of the 3GPP standards with really 16 and 17 and also the availability of the relevant equipment and the support for the capabilities that the core enables in devices, et cetera. So it's absolutely on our roadmap, but certainly for 2021, our priority is prepping the network for C-band.

Fierce: Before we get off C-band, is Verizon planning to use carrier aggregation as part of its C-band deployment?

Dunne: So for the initial deployment, no. But in due course, we will certainly be using carrier aggregation where it's appropriate with so much spectrum available to us. The truth is the bandwidth that we have already is greater than the support that most devices have for carrier aggregation. A lot of them are, you know, two on the down one on the up. When capable devices arrive, we have the opportunity in handsets to use more carrier aggregation where it's appropriate, where we will use that capability in due course is in areas like our residential CPE, where we have the opportunity of bringing both our millimeter wave and C-band together to significantly enhance the capacity that's available for residential broadband.

Fierce: Let's move to fixed wireless access. Verizon has said its 5G Home fixed wireless access is now available in 28 markets. And then in a parallel announcements your LTE Home is available in parts of 48 states. But at your investor day, and I think you just said it a few minutes ago as well, it feels like it's all getting lumped together now in terms of fixed wireless internet services to a total of 15 million households by the end of this year. So are you moving away from specifying whether your fixed wireless services on 5G or whether it's on LTE? 

Dunne: No. So what we will have is two discreet offerings for customers - a 4G FWA offering and 5G FWA. In our Ultra Wideband network we will deploy C-band and millimeter wave. What we want to do is sell those separately as tiers within the network. So, we'll use those together in urban areas of obviously C-band and on a more standalone basis in the more rural areas. What customers will have is they will have a fiber offering under the finest brand in the Northeast. And then we will have on a nationwide basis a 4G fixed wireless access product and the 5G fixed wireless access. Many of the 4G customers will have the opportunity to upgrade in due course to 5G as we roll out C-band. So at the end of this year, we've said between 1 and 2 million homes will be open for millimeter wave. And then the balance of the homes, which gets us to 15 million at the end of the year will be predominantly the switch arm of the C-band. 

We see the opportunity as we're fully rolled out of having the largest addressable market in residential broadband in the U.S. We talk about 50 million homes by 2025 with fixed wireless access. And I already have access to about 17.9 million homes passed in the Fios footprint. So already there in the high 60s million. And then over time at past that five-year horizon, we will go well beyond 70 million homes, and therefore we'll have the largest addressable footprint of any provider in the U.S. a truly national offering. 

Fierce: How do you feel about your network capacity in terms of handling fixed wireless access? There was some controversy with the recent RDOF auction. A lot of fixed wireless access providers won money from the government. There are complaints that fixed wireless access is going to have a hard time handling multiple people watching Netflix. Will this drain the capacity on your network?
Dunne: Our view is that in the more densely populated urban areas or the big suburbs, just C-band on its own would limit the amount of open for sale that we would be able to offer. But those are exactly the same environments in which we hold 1600 megahertz, all the millimeter wave at spectrum. So our opportunity in those more densely populated urban areas and dense residential parts of those is we have the combination of those two spectrums to be able to build that capacity in a way that will meet customer needs and a high level of penetration in the more rural areas where the load on the mobility network is lower. 

The other thing that's a challenge sometimes for standalone fixed wireless access is the availability of backhaul and transport and fiber. But one of the opportunities we have with 200 megahertz is actually to use some of that spectrum as a backup transport layer for the network as well. So we're very comfortable that we will have the capability to deliver significant capacity for residential broadband on a much wider footprint than would otherwise have been available. 

Fierce: Then just a final question on fixed wireless access. We're talking a lot about it in the trade press, but I'm wondering if consumers understand it or know what it is. I think somebody said they went into a retail wireless store lately and asked about it, and the guys working in the store had no idea what it was. So what's your marketing strategy for this? 

Dunne: It’s fair to say for anybody at the moment with fixed wireless access, it's the question of where do you find it? So we're in 63 cities with with millimeter wave at the moment, but we'd be the first to acknowledge that we're deploying our millimeter wave mobility and now fixed wireless access layer. And so many of the areas we're covering have a relatively low residential component to them because it's in those service areas where there's high traffic. And what we said in our investor day the other day is in the medium term, we expect in our urban environments up to 50% of all of the data traffic to be sitting on the millimeter wave network. What changes from a marketing point of view with the arrival of C-band and the depth that we have 161 megahertz on average across the whole of the United States, continental United States, is that we will then be able to light up big broad areas together, which lends itself there to a much more comprehensive and coherent marketing strategy. 

And it's fair to say that in many of my own retail stores today, people haven't been briefed on, 5G fixed wireless access because there is no deployment in their areas. So by the end of this year, through the combination of more capacity being made available in the 4G LTE network, as we prep for lifting some of the current state of traffic straight up into C-band and the switch arm of C-band itself, and therefore increasing the number of homes open for sale, you will see a big acceleration in the marketing program and over the following 18 months going to a much more nationwide marketing opportunity. 

Fierce: As long as we're talking about retail stores — so last year was a crazy year, and a lot of stores closed, and a lot of things moved online. I think Verizon closed 80% of its retail stores in March 2020. What brings us up to date on what's happening with retail stores right now? 

Dunne: Sure. So, in an immediate response to the pandemic back in March, 2020, as you say, we closed the vast majority of our stores, over 80%. We accelerated some of our technology deployments and digital deployments to provide us with the opportunity to do touchless. And we’ll use that capability to build out capacity again in the retail network. Over the second quarter, we got to about 60% of our stores back open. And during the third quarter, we're getting back to the majority of stores open. But then with the second wave of other things, we saw some increase in stores closed at the back end of the year. So coming up to date, I started in January with about 250 of my 1600 corporate stores closed, and as of today that's less than 20. And so we're now back, fully open in retail, but we have an enhanced experience in retail there between the extension of our in-store pickup capabilities, both to our own corporate stores and to our agent's stores. 

We have lockers in many stores for people to do touchless collection. And we have new enhanced capabilities for customers who are entering the store and for making appointments to come into the store to make sure that health and wellbeing is a priority while also enhancing the retail experience. So very much driving next-gen retail and accelerating it out of the context that the pandemic forced us into during the year. So, in a novel way, I sit here probably 18 to 24 months ahead of schedule from the point of view of delivering digital tech into a retail experience. In parallel, we also more than doubled the capacity for our telesales organization and continue to see an increase in the mix of people who are doing some or all of their retail transaction online. 

Fierce: Is this going to save a lot of money for carriers in the future? If people can not have to go to retail stores?

Dunne: So I think it drives two different things. I think it'll evolve the nature of the retail experience, you know, particularly the experiential elements of retail as we bring in new services that are enabled by 5G. When you think about gaming, when you think about home as a category, when you think about working from home. So actually, the role of retail, I think, will in many ways be enhanced and reinforced and that will absolutely be complementary to strong online capability, whether that's in-app with my Verizon app, which helps with both service and at transactions or on the web itself. What we're seeing in our customer service environment is the nature of the questions that customers are asking is different because one of the impacts of the pandemic is that in many respects, consumers became their own IT department because they were working remotely from their office or their educational establishment. And so their expectations of what they needed in the way of support increased. And so we've been able to serve that need both in the call centers itself, but also providing people with wider coverage. So not just mobile phone protection, but actually connected-device protection for the home, et cetera. So it's, I think it's an evolving, rather than it's binary.