Verizon’s on a tear with C-band, adding 5M PoPs in one week

Barely a word was spoken about its aviation-related problems with C-band during Verizon’s conference call Tuesday to discuss fourth-quarter results, with Chairman and CEO Hans Vestberg more focused on the “transformative” nature of the spectrum.  

“This past week has been one of the best since I joined Verizon,” said the CEO, who joined Verizon in 2017. He was referring to the January 19 launch of Verizon’s Ultra Wideband 5G service using C-band spectrum, which it acquired in a public auction last year for more than $45 billion.  

The launch came after a hard-fought battle with the Federal Aviation Administration (FAA) and airlines. Verizon and AT&T, the two largest holders of C-band for 5G, agreed to delays and buffer zones around airports. 

For Verizon in particular, it's been itching to deploy the C-band for the capacity, speeds and coverage the spectrum provides. 

Indeed, if there were any doubt about Verizon’s desire for C-band: In less than seven days, Verizon added 5 million PoPs covered in its C-band deployment, going from 90 million last week to 95 million today. Its mission is to reach 100 million people this month covered with C-band using its first tranche of the spectrum.

At one point during Tuesday's call, Vestberg said his colleagues asked him to clarify that it’s 95 million, not 90 million, PoPs (points of presence) covered with C-band. In other words, Verizon’s network team, led by Kyle Malady, has been extremely busy adding C-band sites over the past week, although Vestberg emphasized that the bulk of the C-band gear is on existing sites rather than new locations.

Verizon pitches its 5G Ultra Wideband as its “high-performing” 5G, up to 10 times faster than typical 4G LTE speeds. Since the high-profile C-band launch last week, Verizon’s C-band boosted its 5G speeds to a peak of 735 Mbps, according to tests by PCMag, which is “far beyond” what they previously saw with the company’s “nationwide” 5G network.

C-band for FWA

Now that Verizon has a lot of C-band capacity, does that change Verizon’s desire to chase market share?

“Clearly, the C-band is just adding enormous amount of capacity for us, but don’t forget the millimeter wave,” Vestberg answered. That strategy “is really working for us as well, because we take a lot of the high-volume areas with millimeter wave which unleash other spectrum,” he said. “And hey, we haven’t even started” to introduce 5G carrier aggregation techniques.  

“I would say clearly, we will be more aggressive on it, especially on fixed wireless access, because we feel so good about the capacity management, and we have the best engineers in the industry… We can go where we want,” he said.

In terms of fixed wireless access (FWA), analysts during the Q&A showed a lot of interest in that service, and it helps that Verizon has learned from its early implementations of it, according to Vestberg. Verizon offers FWA using LTE, millimeter wave and now C-band spectrum. During the fourth quarter of 2021, it added 78,000 FWA customers, for a total of 223,000.

RELATED: Verizon nets 558K postpaid phone adds in Q4

The FWA customers use Verizon’s service as their primary broadband connections, and they’re basically coming from cable and DSL, Vestberg said, so “they’re new to us” as broadband customers and sometimes they’re new “new,” in that they’re not even wireless customers. “I think that’s our sweet spot right now,” he said.

Ahead of last week’s C-band launch, Verizon spent around $2.1 billion on C-band in 2021 as it prepared to deploy the 3.7 GHz spectrum in 46 markets. For 2022, it anticipates additional capital expenditures for C-band to be between $5 billion and $6 billion as it keeps building out those markets and starts to prep for the second available batch of spectrum, which should be available in 2023.

What analysts are saying

It struck David Heger, communications analyst for Edward Jones, as a run-of-the-mill Verizon quarter, where “they typically don’t put up a big disappointment but not necessarily blow-out numbers either.”

What Verizon reported in the quarter was “nothing terribly overwhelming in my mind. Certainly they were ahead of expectations in terms of overall subscriber growth,” with postpaid phone net adds – at 558,000 – a little better than expected.

“Verizon seems to continue to execute as they usually do. They’re typically not the ones posting the greatest subscriber growth numbers, but they’ve been doing a good job of growing average revenue per account and moving customers up to premium unlimited,” rather than going after bulk market share, he said. 

Analyst Craig Moffett of MoffettNathason doesn't have high expectations for Verizon in the 5G world, where T-Mobile has made huge strides in network prowess.

“As we enter the 5G era, Verizon is, well… muddling along,” Moffett wrote in a report for investors. “Their engineers are arguably the industry’s best, and they have moved impressively quickly in their deployment of C-Band spectrum (they are well ahead of AT&T on this score, even if these are early days). Without ARPU growth, and with subscriber growth well below industry levels (again, they are losing market share), it is hard for us to be particularly optimistic about growth prospects when industry growth eventually normalizes, whenever that comes.”

Verizon will host an investor event in New York City on March 3, when it plans to reveal more details about the performance it’s seeing from C-band. "Stay tuned," Vestberg said.