Verizon CEO Hans Vestberg recently said Verizon has succeeded in more than doubling its mid-band spectrum holdings by adding an average of 161 MHz of C-Band nationwide for $52.9 billion including incentive payments and clearing costs.
“We are a multi-purpose network company with the best networks architected by the best engineers on the planet. This idea of a multi-purpose network at scale is our strategic foundation to maximize growth and put us in a position to realize the best return on investment in the fully-networked economy,” said Hans Vestberg, chairman and CEO of Verizon, said.
US carriers Verizon, AT&T and T-Mobile spent a cumulative $78.2 billion on bids during the recent 5G spectrum auction and accounted for 90 percent of $81 billion worth of auctioned licenses.
Verizon’s total mid-band spectrum following the auction would be 192 MHz. Comparatively, T-Mobile’s spectrum is 301 MHz and AT&T’s, 167 MHz.
Verizon won between 140 and 200 megahertz of C-Band spectrum in every available market.
Verizon secured a minimum 140 megahertz of total spectrum in the contiguous United States and an average of 161 megahertz nationwide; that’s bandwidth in every available market, 406 markets in all.
Verizon secured a consistent 60 megahertz of early clearing spectrum in the initial 46 markets – this is the swath of spectrum targeted for clearing by the end of 2021, home to more than half of the U.S. population.
Verizon secured up to 200 megahertz in 158 mostly rural markets covering nearly 40 million people. This will enhance Verizon’s broadband solution portfolio for rural America. The auction results represent a 120 percent increase in Verizon’s spectrum holdings in sub-6 gigahertz bands.
Verizon expects to have incremental 5G bandwidth via the new spectrum available to 100 million people in the initial 46 markets, delivering 5G Ultra Wideband performance on C-Band spectrum. Over 2022 and 2023, coverage is expected to increase to more than 175 million people and by 2024 and beyond, when the remaining C-Band is cleared, more than 250 million people are expected to have access to Verizon’s 5G Ultra Wideband service on C-Band spectrum, Kyle Malady, CTO of Verizon said.
More than 70 percent of the 5G devices in the hands of customers today are C-Band compatible. Every iPhone 12 model is C-Band compatible. The Samsung Galaxy S21 series and Google Pixel 5 are also compatible. Going forward, all new 5G handsets Verizon brings to market to postpaid customers will be C-Band compatible.
The acquisition of this C-Band spectrum will be a critical component in Verizon’s 5G broadband strategy — 5G Home and 5G Business Internet.
By the end of this year, Verizon expects to cover nearly 15 million homes with its home broadband product, and by the end of 2023, 30 million homes, using both 4G and 5G.
Verizon introduced new 5G Home devices which will be simple for customers to install in their homes – including the Internet Gateway, and the Verizon Smart Display, which join the Verizon 5G Internet Gateway.
Verizon said 5G Home internet, the super fast service with download speeds up to 1 Gbps, depending on location, is currently available in 18 markets, with one to two million households expected to be covered via mmWave by end of 2021 and a total of 15 million with LTE Home and the arrival of the first tranche of C-Band.
5G Business Internet is available in three markets on mmWave with plans to bring the product to 20 more before the end of the year.
With the addition of C-Band spectrum, the company expects a wider and faster path to monetization. By the end of 2022, the total edge compute addressable market in the U.S. is estimated to reach $1 billion, and by 2025, rapid adoption of Edge Compute is estimated to create a $10 billion addressable marketplace.
Verizon partnered with AWS and connected AWS’s 1 million plus developer community to the nearly 170 million end-devices across Verizon’s 4G and 5G Nationwide networks at the edge. Developers today are building use cases spanning an array of commercial applications.
Verizon Private Edge combines the power of Microsoft Azure cloud and edge capabilities with 5G on the customer premise. Verizon Private network connectivity, which is forecast to be a $10 billion dollar global market by 2025.
Verizon co-developed real-time enterprise solutions like Intelligent Logistics, Predictive Maintenance, Robotics and Factory Automation, which give Verizon Business a direct line of sight to another $12 billion applications and solutions addressable opportunity by 2025 that will be commercialized through a growing partner ecosystem, including IBM, Cisco, Deloitte and SAP.
The demand for MEC services unlocks an estimated Verizon total market that is forecast to exceed $30 billion by 2025, revenue that will be shared with partners.
The acquisition of C-Band spectrum accelerates Verizon’s five vectors of growth and is expected to deliver strong growth in the years ahead.
Specifically, Verizon is anticipating growth of 2 percent or more in Service and other revenue for 2021, as disclosed at Q4 2020 earnings on January 26, 2021 in the build period of C-Band deployment.
Verizon is expecting growth of 3 percent or more in Service and Other revenue in 2022 and 2023 in the scale period.
Verizon is also anticipating growth of 4 percent or more in Service and Other revenue in 2024 in the nationwide period.
In addition, Verizon is committing to an additional $10 billion in capital expenditures over the next three years to deploy C-Band as quickly as possible. This spend will be in addition to the current capital expenditure guidance of $17.5B-$18.5B for 2021, which is expected to be at comparable levels through 2023.
As of 2020, 9 percent of Consumer postpaid phone base were on a 5G device. “We expect to reach 50 percent some 18 months ahead of GSMA forecast, and end 2023 ahead of even the more ambitious Ericsson Mobility Report forecast,” Ronan Dunne, CEO of Verizon Consumer Group, said.
Verizon has 10 million 5G Ultra Wideband devices in the hands of customers on network today. Of those, approximately 70 percent are already C-Band compatible. Going forward all new 5G handsets it sells to postpaid customers will be C-Band compatible.”
Over 20 percent of postpaid accounts were on a Premium Unlimited plan. “We expect this number to grow to over 30 percent this year and approximately 50 percent by 2023. With C-Band included, we think step-ups to premium will only accelerate,” Ronan Dunne said.