Verizon is planning to start deploying 4G technology in unlicensed radio spectrum next year as it continues to add capacity to its LTE network in the US.
LTE-Unlicensed (LTE-U), which is an earlier version of Licensed Assisted Access (LAA), is a variant of the 4G technology that is deployed in the 5GHz band, which is currently home to 5GHz WiFi.
"We are actually testing it in the labs now," said Verizon Communications Inc. (NYSE: VZ) CFO Fran Shammo on the operator's third-quarter earnings call on Tuesday morning. "We are looking to deploy sometime in 2016."
Shammo says the operator will use it to dynamically add capacity to its 4G LTE network as needed. Shammo says it will be a good way to add capacity at a reasonable cost. (See Wireless Companies Unite to Ward Off LTE-U Regulation.)
This is just one of the ways that Verizon is trying to add capacity and "densification" to its network. The carrier is adding small cells and distributed antennas (DAS) to get the most efficient use out of its existing 4G spectrum. Overall, Verizon has spent $2.9 billion on capital expenditure this quarter, up 8% over last quarter.
"In Chicago, we are on our schedule for small cell deployments," Shammo said. He noted that mobile data usage is up 75% year-on-year in Chicago. (See Verizon Small Cells Ready to Rock in Chicago.)
"New York City and San Francisco are higher than that," Shammo added. (See Verizon Trumpets Network Densification Plans.)
The sheer volume of mobile data usage is what's driving Verizon to try and eke out more from its existing 700MHz and AWS (2100/1700MHz) spectrum. This is possibly because Verizon seems to feel pretty ambivalent about the 600MHz auction expected in March 2016. (See Small Carriers Optimistic for 600MHz Auction Sans Sprint.)
"At this point we do plan to participate, but we'll have to keep an eye on the rules," said Shammo. He suggested that the Federal Communications Commission (FCC) rules, which are due for another vote this week, could mean that the government is "picking winners and losers" among the major carriers, not consumers.
He also noted that Verizon can only use 600MHz in certain areas because of its existing 700MHz holdings. "600 and 700 don't play well together; there's a lot of interference," Shammo said.
"Higher frequency spectrum is capacity and that's really what we need at the moment," he added.
To that end, Shammo said that Verizon will deploy the AWS spectrum it won at auction this year in the 2017 to 2018 timeframe. (See Hey Big Spenders! AT&T, Dish & VZ Splash Cash on Spectrum.)
He is also not above coveting other service providers' spectrum holdings, notably mentioning Dish Network LLC (Nasdaq: DISH)'s swathe of AWS and H-Band holdings, on the call. (See T-Mobile: Google & Dish Could Be 'Interesting' Partners.)
"We've always said Charlie [Ergen, Dish CEO] is sitting on some very good spectrum," Shammo said. The Dish spectrum would fit very nicely with Verizon's requirements for high-band frequencies too.
For the quarter, Verizon reported earnings per share of 99 cents on revenue up 5% year-on-year at $33.2 billion, which slightly tops Wall Street projections for the summer months. Verizon reported net income earnings of $4.17 billion, which was up 9.9% compared to the same period a year ago. The carrier added 1.3 million new wireless customers for the quarter.
— Dan Jones, Mobile Editor, Light Reading