Verizon executives on Tuesday morning welcomed the new year with gusto.

2021 was "a catalyst year for Verizon," CEO Hans Vestberg explained during the company's fourth-quarter earnings call with investors. "We begin 2022 with a strong portfolio of assets."

Indeed, Verizon enters 2022 on top of a number of massive moving parts. The company reported that it recently finished its $10 billion cost-savings program, several quarters ahead of its internal schedule. Separately, Verizon expects to dramatically ramp up spending on its network this year in order to deploy more 5G services on its C-band spectrum. But company executives also noted that Verizon's overall capital expenses ought to fall significantly in the years to come.

Verizon also recently became the nation's largest provider of prepaid wireless services, following the recent close of its $7 billion purchase of América Móvil's TracFone. And Verizon just a few days ago switched on a speedy midband 5G network that covers around 95 million Americans.

"2022 is positioned to be our best year yet," CFO Matt Ellis declared on the company's call.

However, some financial analysts offered a far more measured reaction to the company's fourth-quarter earnings results and 2022 outlook.

"Verizon is ... a well-run, stable business. That fully justifies its 'port in a storm' status at a time when so many surrounding stocks were so egregiously overvalued," wrote the financial analysts at MoffettNathanson in a note following the release of Verizon's fourth-quarter earnings results. "But we struggle to buy into a longer-term growth story."

Other analysts largely agreed.

"We do remain concerned about Verizon's longer-term prospects in wireless, and expect pressure from T-Mobile to ratchet up later this year (after the Sprint network shutdown), fueled by T-Mobile's big lead over Verizon on deploying upper midband and big lead on total holdings in midband spectrum," wrote the financial analysts at New Street Research in a note of their own Tuesday. "Verizon management's aspirations for strong service revenue growth driven by rising ARPU [average revenue per user] and growing subscribers also still seem way too optimistic in the face of rising competition from a challenger [T-Mobile] with a similar (if not soon-to-be better) network offering priced at a steep discount."

Nonetheless, Verizon executives maintained a positive outlook. "We feel really good about the momentum we have," Vestberg reiterated.

Q4 snapshot

Here are a few of the top takeaways from Verizon's fourth-quarter earnings report:

Customer gains: Verizon reported a total of 558,000 postpaid phone net customer additions, mostly in line with analysts' expectations but behind the figures that AT&T and T-Mobile have reported for the quarter. Verizon officials said that fully 74% of the company's new customers in the fourth quarter opted for Verizon's "premium" unlimited smartphone data plans, up from 71% in the third quarter. And Verizon's Vestberg said that just a third of Verizon's total customer base subscribes to those more profitable "premium" unlimited data plans. He said that "leaves room for continued step-up expansion."

Figure 1: Verizon reported growth in its customer base, partly thanks to its acquisition of TracFone. Click here for a larger version of this image.
(Source: Verizon)

5G: Verizon reported that roughly one-third of its customers now have 5G-capable phones, up from one-fourth in the third quarter. And Vestberg said that Verizon's launch of 5G technology in its C-band spectrum holdings "is adding ... a lot of [network] capacity for us."

C-band interference: Vestberg said that Verizon has the "highest assurance from the White House" that its battle with the airline industry will soon be over. Airlines and others managed to indefinitely delay Verizon's launch of C-band signals near airports over fears those signals would interfere with aircraft landings. The airline industry is currently working on ways to address those concerns.

Capex: Verizon said it expects to spend $16.5 billion to $17.5 billion on capital expenses (capex) during 2022, which the company said is a decrease from the $18.2 billion it spent in 2021. However, those figures do not include money Verizon is spending to put its C-band spectrum licenses to use. In 2021, Verizon spent $2.1 billion on its C-band 5G network buildout, and expects that figure to rise to between $5 billion to $6 billion during 2022. Then, in 2023, Verizon expects to spend around $2 billion to finish its C-band buildout. After that, company officials reiterated that they expect to significantly reduce Verizon's overall capex.

2022 outlook: Verizon said it expects overall revenue growth of around 3% during this year.

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