Verizon 5G is here but CEO does not expect huge revenue hike

Verizon CEO Hans Vestberg did not have much to reveal on its 5G achievements after the commercial launch in Oct — during the recent earnings call.
Verizon CEO Hans VestbergVerizon claims that it was the first telecom operator to go live with a commercial 5G service. Verizon’s 5G Home went live in October 2018. But Verizon CEO did not reveal the number of users on the world’s first 5G service. Verizon’s 5G Home is a broadband service that offers 5G speeds to residential and business customers.

Verizon is facing a huge crisis in the early stages of its 5G business because of the lack of 5G CPEs available.

Verizon’s 5G Home customers are expected to receive CPE equipment on the NR standard in the second half of 2019. 5G smartphones will be available in the first half of 2019. Verizon is planning to bring 5G smartphones from Motorola and Samsung.

Verizon is not expecting significant increase in revenue in 2019, the first full year of its 5G launch. Verizon said it is anticipating low single-digit percentage growth in revenue in 2019. Verizon’s operating revenue was $34.3 billion (+1 percent) in Q4 and $130.9 billion (+3.8 percent) in the full year.

Capital spending for 2019 will be in the range of $17 billion to $18 billion, including the expanded commercial launch of 5G, Verizon said. $16.7 billion was the total Capex  for Verizon in 2018 despite making investment in 5G networks.

“2018 was a year of 5G firsts. We were first to complete an overlay of data transmission on the 5G global standards. We were first to complete the first 5G data session on smartphones,” Hans Vestberg said.

Verizon is spending on technology such a small cells, dense fiber or LTE advanced features to continue its 5G leadership.

“We have the spectrum to provide ultra-wideband 5G services. Fiber backbone connects our assets, enabling a high-capacity and efficient architecture. Our investment in the intelligent edge network creates new capabilities and gives us the flexibility to serve our customers,” Hans Vestberg said.

Verizon 2.0

Hans Vestberg also announced Verizon 2.0 targeting to create a new operating model by giving special focus on customer-facing units. Verizon 2.0 will go live in the second quarter of 2019. Verizon will present its results for the second quarter under the new structure.

“This transformation in how we face our customers is matched with the transformation under our business excellence initiatives,” Hans Vestberg said.

Verizon recently announced voluntary separation program and plans for our IT outsourcing as part of improving business efficiency.

Baburajan K