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OSS/BSS/CX

Verizon: Global chip shortage shouldn't slow 5G

Last week, a top Verizon executive said that the ongoing global chip shortage should not affect the company's efforts to upgrade its 5G network with valuable midband spectrum.

Verizon network chief Kyle Malady told the financial analysts at Cowen that he's seeing "no issues thus far around global equipment shortages" and is confident that Verizon's "supply chain remains strong and able to handle equipment demand needs for deployment."

That's important, considering the ongoing global chip shortage has begun to create significant problems for a wide variety of 5G players. For example, T-Mobile warned that its 5G fixed wireless Internet service will be "limited by global supply chain constraints at launch." Separately, optical networking company Infinera said the shortages could cost it up to $10 million over the next few months. And Gogo announced it will delay the launch of its planned 5G network from this year to 2022 due to the shortages.

For Verizon, the issue is key because the company is feverishly working to upgrade up to 8,000 cell sites in the next 12 months with speedy midband C-band spectrum. The operator earlier this year spent just over $50 billion on C-band spectrum licenses across the US and is working to put that spectrum to commercial use in its 5G network starting early next year. The spectrum ought to allow Verizon to offer up to 1Gbit/s speeds across large portions of some major cities by next year.

Verizon plans to profit from the endeavor by reserving the speedy flavors of its 5G offering – those working on its midband or highband, millimeter wave (mmWave) spectrum bands – only for those customers who subscribe to its more expensive unlimited data plans. Verizon's lowband 5G – which isn't much faster than its 4G network – will be available across all of its unlimited data plans.

Although Verizon doesn't expect the global chip shortage to affect its C-band efforts, the company did announce a recall of up to 2.5 million mobile hotspot devices.

Among the other tidbits that came out of Malady's discussion with the Cowen analysts:

  • Verizon has been adding macro cell towers to its network at the rate of about 2,000 per year, and now counts around 68,000 macro sites. The company expects to continue adding sites to its network at roughly the same pace, though it will shift from mostly urban areas to mainly rural areas.
  • Malady reiterated Verizon's view that 5G signals in C-band spectrum will propagate slightly better than 5G signals in 2.5GHz spectrum. He also said the company expects to handle both 5G uplink and downlink connections inside the C-band, but that it "reserves the right" to handle uplink connections in other bands.
  • The Cowen analysts said Verizon explained that it "has not de-emphasized mmWave in its coverage footprint." The analysts also said that Verizon continues to maintain its initial goal of covering up to 30 million households with mmWave connections with around five to eight years. However, that initial goal was made before the company acquired C-band spectrum, and now Verizon expects to use C-band spectrum and other spectrum bands to expand its services, including its fixed wireless Internet offerings.
  • On fixed wireless technologies and network capacity and speeds, the analysts wrote that "Verizon admits it is not fiber-like." That's noteworthy considering Verizon's former CEO described mmWave 5G transmissions as "wireless fiber" in 2016.
  • Finally, Verizon's Malady said the operator's "one fiber" buildout program is nearing its final phase and should completely wind down around 2024.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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