Verizon's CEO acknowledges supply chain, labor constraints

Although the company has not yet suffered any significant setbacks due to the issues, Verizon's CEO said he's seeing shortages in both the supply of equipment and the supply of willing workers.

"We continue to execute on the plan that we laid out," Verizon's Hans Vestberg said this week at an investor event. "The team finds ways."

But he said Verizon has had to employ unspecified "workarounds" to continue building out its network and staffing its retail stores.

"We've never deployed so much," Vestberg boasted, explaining that the company remains on track to install 14,000 new millimeter wave 5G transmitters this year and to upgrade up to 8,000 cell sites with C-band spectrum. He also said that Verizon is now building around 1,200 to 1,500 route miles of fiber every month. That's down from a high point of 2,000 route miles of fiber every month, he said, but explained the reduction is because Verizon is mostly finished with longer fiber routes and is now working on shorter routes.

"We are on plan," he said of Verizon's overall network expansion efforts. "There are some challenges in the supply chain," he acknowledged, but added that "my team is doing a fantastic job to workaround, work with suppliers."

Interestingly, Vestberg said that Verizon also has had no troubles obtaining technicians to staff its network-construction program. But the same is not true in Verizon's retail operations.

"In the retail, we have all our stores open. There are tougher labor markets there," he said. "But with the value we're giving our employees, we've seen a great retention on them. But it's a little bit tougher right now than a year ago or two years ago when it comes to that category of employees."

"We have to do workarounds" in retail, Vestberg said, though he did not provide details.

Vestberg's comments don't come as a surprise. Retail businesses from restaurants to grocery stores have struggled to find enough workers amid the ongoing pandemic. (Indeed, the author of this article struggled this morning to get his kids to school due to ongoing shortages of school bus drivers nationwide).

But Vestberg's comments on Verizon's ongoing network buildout effort stand in contrast to more detailed problems expressed by the company's competitors. Although AT&T and T-Mobile haven't warned of any delays in their 5G midband network buildout efforts, both have signaled difficulties in other areas. For example, AT&T has reduced the scope of its massive fiber network expansion due to trouble obtaining enough equipment, while T-Mobile has warned about the short supply of Samsung smartphones.

Such issues ultimately stem from the shortage of electronic components – a situation some chipset suppliers have warned might stretch into 2023.

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