Wireless

Verizon CFO talks C-band delay, FWA momentum

By Bevin Fletcher Nov 17, 2021 1:09pm

AT&T and Verizon are facing delays to their respective C-band rollouts as the Federal Aviation Administration works with the FCC and industry to resolve potential 5G interference conflicts, but Verizon CFO Matt Ellis on Wednesday suggested that the hold up won’t linger longer than one month.

Speaking during Morgan Stanley’s European Technology, Media & Telecom investor conference Ellis cited high confidence that the FAA situation is just a 30-day delay, adding that the parties are going through a bit of a process to get everyone aligned.

After spending billions of dollars each at auction earlier this year for licenses in the 3.7-3.98 GHz band, AT&T and Verizon this month voluntarily pushed back initial C-band rollouts for the first 100-megahertz batch of spectrum from December 5 to January 5 after the FAA raised concerns over potential interference with airline equipment safety equipment. Concerns are tied to older radio altimeters operating in the 4.2-4.4 GHz band. The agency then signaled it may need longer than a month, but on Tuesday Bloomberg reported the head of the FAA as saying aviation regulators, the FCC and the telecom industry were having “very productive discussions” on the matter of mitigation steps.

Regarding the FAA, Ellis on Wednesday said "you know, highly confident this is just a 30-day delay.” He added that the spectrum can clearly be used, pointing to deployments in Japan, Australia and parts of Europe without impacts on aviation.

“All of the groups are working together to get this resolved as quickly as possible, and we’re very very confident that the 30-day delay that we spoke about is the only one that will be needed here as we go forward,” Ellis said, adding that Verizon is still on track to reach 100 million PoPs with C-band coverage in the first quarter of 2022.

FWA a 5G killer app

While on the topic of C-band, Ellis talked up progress on the fixed wireless front for both 4G LTE and 5G mmWave – with C-band coming up for both customers in the near future.

Asked if fixed wireless is a key 5G killer app, Ellis responded positively.

“Yes, it is,” Ellis said during the virtual event. “We absolutely believe that to be the case.”

Verizon has two versions of fixed wireless service, 4G LTE-based and its 5G Home using high-band millimeter wave spectrum.

In the third quarter Verizon disclosed figures, adding 55,000 fixed wireless customers for a total of 150,000 as of the end of September. Coverage with 4G and 5G FWA stands at 11.6 million homes, with Ellis reiterating that the company is on track to reach 15 million by the end of the year. That number aims to hit 50 million by the end of 2025. Combined with what he described as high-teen millions on the Fios side, it will be close to 70 million premises passed with home broadband in the next few years.

For progress on the mmWave front, Verizon will have over 30,000 sites by the end of 2021 compared to just 2,000 sites two years ago, according to Ellis.

5G fixed wireless markets follow the buildout of its network while LTE fixed wireless services has more recently been determined on a site-by-site basis where Verizon has enough excess capacity. Initially launching last year, LTE coverage first focused largely on rural areas and over the past year has grown to include some suburban and urban locations as well and is seeing good traction, Ellis noted.

When it comes to LTE, he pointed to customer premises equipment (CPE) that was upgraded over the summer so routers already support C-band and customers can upgrade when that becomes available in major markets.

“As we turn C-band on we already have the hardware available, it's already in some customers homes,” Ellis said. “So those customers who are in those first 46 markets that the C-band will get turned on, will have the opportunity to step up from the 4G Home to the C-band version of that as well.”

Like with Fios, the fixed wireless footprint can also extend to businesses. For example, Verizon is delivering 5G fixed wireless to certain Walgreens locations under a network-as-a-service deal inked in late 2020 covering 9,000 retail stores. 5G Business Internet FWA service expanded to 57 U.S. cities last month, while 5G Home was available in 60.

During Wednesday’s event Morgan Stanley analysts pointed out that Verizon has been highlighting the idea of being the go-to provider for broadband nationwide and asked Ellis about the potential to bundle home and mobile service thanks to fixed wireless access.

He said it expands where Verizon can offer broadband, which right now is mainly restricted to the carrier’s Fios footprint.

“We get to take the ability to provide broadband from being a regional play to a nationwide play, and that’s tremendously exciting when we think of what we can do with that,” Ellis said. “Across the different technologies getting up towards 70 million homes by the end of 2025 we think that gives us the opportunity to play in this space in a way that nobody does so far.”

T-Mobile is also making a play on the fixed wireless front – pushing into rural areas with LTE and 5G offerings. In September T-Mobile’s FWA tally stood around 600 locations in the U.S., while its mid-band 2.5 GHz 5G footprint just expanded to cover 200 million people, ahead of schedule.

In bringing mobile and home broadband together, Verizon sees consumers and businesses viewing it as their “connectivity partner” with service working wherever they are.

“How we market to our customer base in terms of offering those products together is a significant part of the growth opportunity,” he said.

In terms of home broadband getting attention, Ellis touched on the recently signed massive $1 trillion infrastructure bill that includes $65 billion for broadband and which Verizon expects to benefit from via fixed wireless. He said Verizon will be thoughtful in its pursuit of federal funds and participate where it makes sense.

“What I think it shows obviously is the importance of broadband in people’s lives and access to every aspect of the digital economy,” he said. Verizon’s been building out Fios as part of that “fixed wireless access gives us the opportunity to also be part of the solution there.”

Ellis emphasized that he believes the bill shouldn’t favor a specific technology.

“Let’s let the marketplace determine the right solution in each geographic location,” he said, noting that aside from fiber to the home, fiber to a cell site with FWA service provides a compelling product at a great price for customers as well.

TracFone deal on track

Also top of mind is Verizon’s pending $6.9 billion acquisition of TracFone, which Ellis said is teed up to close before the end of the year.

There are still two hurdles outstanding, including a vote by the California Public Utilities Commission (CPUC) that’s on the agenda for a review vote Thursday, as well as FCC approval.

Ellis indicated that vacant seats and an unfilled leadership position on the FCC had left some uncertainty, but expressed optimism as President Joe Biden recently made nominations. That includes Jessica Rosenworcel as FCC Chair (Rosenworcel has been serving as Acting FCC Chairwoman in the interim), in another term on the commission and Gigi Sohn to fill the open seat for a fifth FCC Commissioner.

“Great to see in the last couple of weeks that the administration has put forth nominations for those two seats and so we think we’re very much on track to complete that transaction during the course of the quarter,” Ellis said.

With the Tracfone deal Verizon is aiming to compete more directly in the prepaid space, where its current presence is tiny compared to main competitors but would jump to the leading position in terms of subscriber figures. Tracfone would bring roughly 20 million customers under the Verizon umbrella, a good portion that are already riding on the carrier’s network under a wholesale deal. For the roughly one third of TracFone subscribers that aren’t already on the Verizon network, Ellis said consumers will get an upgrade while Verizon benefits from cost savings as well.

Updated with additional Ellis quotes regarding C-band delay timing.

Verizon Matt Ellis Federal Communications Commission (FCC) 5G C-band fixed wireless fixed wireless access Tracfone Wireless