Verizon CEO defends mmWave strategy for 5G

Faced once again with persistent questions about its spectrum position for 5G, Verizon Chairman and CEO Hans Vestberg said the carrier’s spectrum strategy for 5G—using millimeter wave spectrum—is unique, and nobody else has the capability to do it like Verizon.

The comments came during Verizon’s fourth quarter earnings conference call, at the start of which the company said it would not talk about millimeter wave (mmWave) because that auction is ongoing. (The clock phase of Auction 103 just concluded today.)

Other carriers are using mmWave spectrum to varying degrees, but Verizon is unique in how mmWave is at the heart of its 5G strategy, one that continues to draw snark from Wall Street analysts and others who question the economics. The higher band spectrum requires many small cells, and it’s concentrated in “hot spots” or small areas within metro areas, which is where Verizon says the most demand exists. Verizon also happens to have acquired the lion’s share of mmWave spectrum on the secondary market, via its acquisition of Straight Path, for example.

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Vestberg was asked about a LightShed Partners report that came out earlier this week based on a massive data set from Opensignal that suggests Verizon’s markets are stressed in terms of spectrum allocation, raising questions about its network management strategy. The report did not include mmWave in the calculations, and made comparisons with other U.S. carriers’ spectrum positions.

“In our case, I think we’re building a unique 5G experience with our millimeter wave that nobody else is building” and has the capability to do, Vestberg said. “I think that’s really where the difference will come. We already have the best 4G network, as you have seen from the latest J.D. Power and RootMetrics [studies]. We’re going to continue to have that. We’re going to give the best experience to our customers and I’m confident that how we are building the network will make a big difference.”

That’s also why Verizon feels confident that with the advent of some 20 more 5G devices this year, including a potential 5G iPhone, “we will have a good chance to grab more customers that want to be on our network,” he said.

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As for spectrum, “We first of all have all the assets to deploy our 5G strategy” when it comes to mmWave, and it will be using dynamic spectrum sharing (DSS) for coverage nationwide when the market is ready for that, Vestberg said.  

Another thing, said the former Ericsson executive, is spectrum is not the only thing that is needed to deliver a great network. “I’ve worked with over 400 carriers around the world in my life,” and that’s a lot of carriers with a lot of spectrum but they don’t all have a great network. “I came to this company because this company is best in the world" in how to deal with things like spectrum, densification and software, and that requires long-term planning, he said.

He added that many also doubted Verizon would be able to sustain an “unlimited” plan strategy. “We feel good about the position we have,” he said, noting that it’s encouraged by the FCC’s plan with C-band. The C-band is important for many reasons, including that it will be used for global roaming, he said.

CFO Matt Ellis acknowledged that Verizon engineers saw the Opensignal report, which doesn’t take into account their planning and line of sight to meet the needs of customers for years to come. “I’d put money on our engineering team every day of the week, and their track record is second to none. We’re very, very confident that we have the spectrum that we need to continue to grow the business,” he said.

That said, U.S. carriers are in need of mid-band spectrum, and have been lobbying to get that released through the FCC as soon as possible as other countries already use it for 5G. Asked about the auction for Citizens Broadband Radio Service (CBRS) 3.5 GHz spectrum coming up in June, Vestberg said the carrier has already done trials and “it works fine,” and CBRS is important even though it’s more shared than anything else.

RELATED: Verizon touts CBRS deployment with Ericsson, Federated Wireless, Qualcomm

Years in the making, the CBRS band entered the commercial stage this week with the FCC announcement that it had authorized the Spectrum Access System (SAS) administrators that are enabling the sharing of the spectrum. The unlicensed portion of the band is available for use before the auction for licensed operations.