Light Reading

Verizon Continues 4G LTE Capacity Spend in Q2

Dan Jones
7/22/2014
50%
50%

Verizon Communications is continuing to focus on spending to increase its 4G network capacity as users and data traffic migrate to its faster LTE network.

On the operator's second-quarter earnings call Tuesday morning, CFO Fran Shammo said that Verizon Communications Inc. (NYSE: VZ), which took full control of Verizon Wireless this year, spent $2.8 billion on wireless capex in the spring quarter. In particular, Verizon has been adding LTE capacity by layering in advanced wireless services (AWS) spectrum with its existing 700MHz network. (See More 4G Muddling: Verizon Brands AWS XLTE and Marketing Verizon's Double-Wide 4G in NYC.)

"We now have more than 350 markets with AWS, or XLTE we are branding it," Shammo said on the call. "We are investing to stay ahead of demand." (See Verizon Leads With Double-Wide 4G.)

In addition to the expanded LTE, the capacity upgrades will include adding distributed antenna systems (DAS) and small cells to improve localized coverage, Shammo said. (See Verizon Deploys AlcaLu's LTE Small Cells .)


Psssst! Want to know more about small cells? Check out our dedicated small cells content channel here on Light Reading.


Overall, Verizon expects total capex for the year to remain in the $16.5 billion to $17 billion range, with a decrease in capital spending as a percentage of total revenues for the full year.(See Capex Trend Points to Less Seasonality – Analysts.)

There are good reasons why Verizon is focused on adding more LTE capacity to its network in 2014. Shammo said that 76% of the data traffic on its network now runs over 4G LTE and that number will continue growing.

The operator activated 2.3 million new LTE devices on its network during the quarter. One million of these were smartphones and 1.2 million were tablets.

Shammo highlighted the growth trend in tablets as especially crucial, saying that Verizon currently has 5.4 million monthly contract (postpaid) customers with tablets on the network.

"We see that as a great opportunity to grow in 2014," Shammo said.

He warmed to the tablet topic again in the Q&A portion of the call. "Tablets are extremely good for the industry, not just Verizon," he said, driving traffic uptake and helping to reduce churn. "These 4G tablets drive more usage on the network than 3G smartphones," he added.

Of course, ever-increasing wireless data usage will eventually require more bandwidth for fast data services. In response to questions, Shammo said that Verizon is currently more focused on grabbing AWS-3 spectrum, which will go under the FCC hammer on November 13 this year.

He said that, as yet, the operator is less focused on the broadcast spectrum expected in 2015 at the moment. "There's no final rules laid out."

— Dan Jones, Mobile Editor, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DanJones
50%
50%
DanJones,
User Rank: Blogger
7/22/2014 | 3:12:43 PM
Re: Tablets
Yeah, they're basically giving them away. Shammo *still* says they're less of a subsidy than an LTE smartphone though.
KBode
50%
50%
KBode,
User Rank: Light Sabre
7/22/2014 | 2:42:43 PM
Re: Tablets
I really didn't think it would work. The tablet they're offering for free (their own branded tablet) is faiirly awful. Wonder how many of those subscribers they lose down the road? Wonder how many buy the tablet, use it a bit (or upgrade), but forget to take it off of their account? Will be interesting stats to watch.
milan03
50%
50%
milan03,
User Rank: Light Sabre
7/22/2014 | 2:23:38 PM
Re: Tablets
Karl, that's exactly what Verizon's stragtegy is. Free tablet + $10 to add it to your account = additional Net Adds and ultimately revenue.

They've actually lost ~700,000 phone subs YoY.
KBode
50%
50%
KBode,
User Rank: Light Sabre
7/22/2014 | 1:47:11 PM
Tablets
I had no idea that tablets were such a driving force and that connections were so high. It seems silly to me to buy an LTE tablet when I can just tether it to an LTE smartphone. I just bought a new LG G3 phone in a Verizon store, and they were almost THROWING tablets at me for free in the hopes I'd sign up, pay the $10 extra connection fee, and drive up my monthly usage.

I wouldn't have thought this strategy would work on most people, but apparently it works very, very well.
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
7/22/2014 | 12:53:00 PM
Home, streaming use
I will ask the same question I've been asking about Sprint's plans for 4G.


Other than mobile, will Verizon have a wireless broadband service for home use?  An unlimited high speed plan for uses like Netflix?  I am a Clear Wimax customer and have been wondering what will be the replacement home broadband technology, if any.

 
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (7) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
What's in Your Office-in-a-Bag?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 6/26/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones