During a three-hour presentation, Verizon laid out its broad market strategy for investors. At the heart of the company's strategy is to build a 5G network "as a service" and use it to expand its existing smartphone business, and also extend into new opportunities.
According to Verizon's leadership team, the first and clearest of those new opportunities is fixed wireless access (FWA).
Specifically, the company said it now expects to report the addition of at least 150,000 new FWA customers in the first quarter of this year, double what it reported in the fourth quarter of last year.
Verizon said it now expects to record a total of 4-5 million FWA customers by 2025. That's slightly below T-Mobile's goal of gaining around 7-8 million FWA customers during roughly the same time.
Verizon executives said that around 30% of the operator's FWA are new to the company, which they said provides Verizon with the opportunity to sell additional services including mobility to those customers.
Company officials reiterated their belief in Verizon's ability to handle the massive amounts of network traffic that homes and offices can generate.
Verizon CTO Kyle Malady explained that Verizon today has deployed 60MHz of midband C-band spectrum for FWA, but it will raise that number to around 160MHz by 2023 when the rest of the company's C-band holdings are freed for commercial 5G. The amount of spectrum an operator deploys into its network directly relates to the amount of traffic it can support.
Malady also suggested that traffic patterns favor Verizon's FWA strategy. He said smartphone traffic typically peaks between 12 p.m. and 6 p.m., thus freeing up network resources after that time. And that's typically when FWA traffic starts to ramp up, he said.
From the edge to the metaverse
According to Verizon's executives, the company's second major opportunity revolves around edge computing.
Whether it's private edge computing services supporting private wireless networks, or public edge computing running on services from Amazon, Microsoft or Google, Verizon said it will work to flesh out the opportunity.
Along those lines, Verizon reiterated the massive opportunity it sees around edge computing, and said that it expects to generate at least $1 billion in revenues from public MEC (multiaccess edge computing) services by 2025.
And third, company executives suggested that, beyond FWA and edge computing, the next big opportunity for Verizon sits in the metaverse. Along those lines, Verizon announced a "first-of-its-kind strategic partnership" with Meta (formerly Facebook) geared toward developing a Verizon position in the metaverse.
"The collaboration will explore how Verizon's mobile edge compute infrastructure can deliver intensive XR cloud rendering and low latency streaming, which are core capabilities needed for metaverse applications," Verizon explained.
Verizon's announcement with Meta is noteworthy considering the social media company used the recent MWC trade show in Barcelona, Spain, to lay out its networking vision for the metaverse.
Finally, Verizon also expects to record growth from its core smartphone business. For example, the company expects 4% wireless service revenue growth by 2024, and a similar increase in earnings before interest, taxes, depreciation and amortization (EBITDA).
Part of that growth is based on Verizon's hopes to get its customers to sign up for more expensive unlimited data plans; around 33% of Verizon's unlimited plan customers subscribed to those kinds of plans at the end of 2021, and Verizon expects that number to rise to 70% by 2025.
"Today we're here to talk about a very different Verizon," CEO Hans Vestberg said during the operator's presentation.
"No company is better positioned than Verizon," he added. "We're building on 21 years of proven leadership."
Of course, Verizon's strategy ultimately revolves around its network. Broadly, Verizon reiterated that its overall capital expenses would start to decline next year from a high point of $22.5 billion in 2022 to around $17 billion starting in 2024.
On the fiber side of things, Verizon said it expects to expand its Fios network from around 16.5 million locations at the end of 2021 to around 18 million by 2025. By then, Verizon said it expects around 8 million Fios customers.
Concurrently, the company said it's working to connect more cell sites to its owned fiber network. Verizon said around 45% of its cell sites connected directly to its fiber network at the end of 2021, a figure it expects to increase to 50% by the end of 2022. Verizon said it saved $300 million during 2021 by connecting its cell sites to its fiber network, instead of paying rent to other fiber providers.
On the wireless side of things, Verizon said it expects to expand its new midband C-band 5G network to reach 175 million people by the end of 2022. Previously Verizon said it would reach that goal by the end of 2023.
However, Verizon said that "for now" it would maintain its previously announced target of covering 250 million people with C-band 5G by 2024.
Interestingly, Verizon's Malady said the operator would start expanding its 5G standalone core sometime later this year. He said Verizon is currently seeding the market with phones capable of supporting the standalone version of 5G, which does not require an anchor 4G network.
He said Verizon would begin shunting some FWA traffic onto its standalone 5G core in June. However, he said Verizon wouldn't start putting smartphone traffic onto that core until 2023.
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