Verizon Readies Mid-Band 5G For 175M
March 10, 2022
Verizon Communications detailed an acceleration in availability of its market-leading 5G Ultra Wideband network to an expected 175 million people by year-end 2022. This new fast tracked timeline is made possible by the incredible pace of deployment achieved by Verizon’s network engineering team.
At the company’s Investor Day 2022, the leadership team outlined its vision and strategy, powered by its leading 5G network and the source for the company’s growth over the next several years. As the world continues to transition to a more hybrid work environment and is increasingly mobile, the new currency will be ultra-fast, ultra-reliable connectivity, creating new markets and ushering in the 5G economy. The company’s Network-as-a-Service strategy was built to drive the 5G economy through an ever-expanding volume of services and technologies that are enabled by 5G Ultra Wideband’s capacity to connect to a massive number of devices at high speed.
The company outlined multiple paths to growth: 5G Mobility, Nationwide Broadband, Mobile Edge Compute (MEC) and business solutions, the Value Market and Network Monetization, stating expectations that it will drive 4 percent service and other revenue growth for the company in 2024 and beyond.
“Through our deliberate strategy of investment and divestment we have already significantly increased the size of our addressable market which, over the next 5 years, should grow an additional $120B. We chose a strategy where we not only participate in a much larger market but also a market where we are in the leading position in our paths to growth,” said Hans Vestberg, Verizon Chairman and CEO. “Verizon's transformative technology and Network-as-a-Service platform is what enables the 5G Economy and makes us the partner of choice for key customers and applications providers. Our high-capacity, low-latency network delivers a superior, unmatched experience that will enable all of our stakeholders to live, work and play in new and amazing ways for years to come.”
Vestberg went on to say, “Verizon’s networks power a future-proof strategy, built on strong trends in Mobility, Broadband and Cloud. We imagined a world of hyper-connectivity and massive capacity, knowing it would inspire innovation and new use cases. We see immense momentum today and what has us most excited is that we know that our network will support use cases that have not yet even been imagined.”
Optimizing the Metaverse with Verizon’s 5G Network
Over the next decade, the metaverse will enable immersive, interconnected and interoperable digital spaces to help people connect in ways not yet possible. These metaverse experiences will be delivered across all screens, at home, at work, and on the go and customers will want to have those experiences on the industry’s leading 5G network. That is why Verizon unveiled a first-of-its-kind strategic partnership with Meta that aims to couple Verizon’s 5G Ultra Wideband network and edge compute capabilities with Meta’s technologies to understand the foundational requirements for metaverse applications. 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.
Introducing +play, a new ultra innovation content hub exclusive to Verizon customers, coming later this year
Verizon announced +play (plus play), exclusive to Verizon customers. This unique, direct-to-consumer platform allows users to discover, purchase and manage some of their favorite subscriptions across entertainment, audio, gaming, fitness, lifestyle and more – ALL in one place. +play builds on the content Verizon already offers through leading providers including Disney+, Hulu, ESPN+, discovery+ and AMC+, all of whom are featured in the new service, and introduces new partners, including Netflix, Peloton, Live Nation’s Veeps, WW International, Inc., A+E Networks, The Athletic, Calm, Duolingo, and TelevisaUnivision’s Vix+, among many others.
Expands private networking solutions as gateway to ultra-private mobile edge compute
With traditional wireless technology solutions, organizations are often left with coverage gaps, fractured security and inconsistent service quality that leads to costly downtime and lower productivity. To solve this problem for its customers, Verizon Business announced a new, cost competitive, turn-key private networking solution with Celona, that will accelerate the use of private 5G to support a new generation of business initiatives. Together, Verizon and Celona will offer one solution with a common relationship, contract, support center and implementation team.
Verizon’s On Site LTE and 5G solution provides customers a private and secure on-premises cellular wireless network on which to run critical business applications and operations. Verizon customers can now use a Celona LAN to deploy the private core on-premise, or on any private or public cloud.
Ultra C-Band acceleration drives additional subscriber growth in nationwide broadband
The expansion of Verizon’s C-Band coverage provides additional growth opportunities in nationwide broadband with over 150,000 net additions expected for fixed wireless access alone in the first quarter of 2022.
As the company continues to expand its 5G network over the next few years, it plans to:
Accelerating Revenue and Cash Flow Growth
With the benefit of the accelerated C-Band deployment, new products, services and partnerships described above, Verizon expects to generate service and other revenue growth of approximately three percent in 2022, excluding the net impact of the sale of Verizon Media and the company's ownership of TracFone; at least three percent in 2023; and four percent in 2024 and beyond. Coupled with anticipated reduced capital intensity to below 12 percent in 2024 following the conclusion of the initial C-Band build, the company expects faster growth in free cash flow and a resulting step down in leverage.
CFO Matt Ellis stated that Verizon will consider share buybacks when the company reaches a 2.25x net unsecured debt/adjusted EBITDA leverage ratio, slightly above its long-term target range of 1.75x-2.0x.
“Our capital allocation priorities are unchanged: Investment in the business, commitment to the dividend, a strong balance sheet and share repurchases, in that order,” Ellis said. “Our diverse growth opportunities, combined with our unmatched assets and proven track record of execution, position us well for the future. Our expected strong cash flow provides additional optionality, and we look forward to continuing to deliver for all of our stakeholders.”