verizon 5g strategyVerizon wants to make 5G “impossible to ignore,” said Ronan Dunne, Verizon executive vice president and CEO of the company’s consumer group, at a financial conference today. Key elements of the Verizon 5G strategy include tiered price plans and using network slicing to isolate specific 5G “currencies” tailored to the needs of specific customer segments, Dunne said.

The company also wants to make sure that consumers understand the value proposition that the company’s Ultra Wideband offering provides, Dunne said. Ultra Wideband is the brand name that the company uses for its service deployed in millimeter wave spectrum, which supports the highest 5G speeds but over relatively short distances.

Verizon 5G Strategy
At a time when some people are questioning the money carriers are spending to build out 5G, Dunne made a convincing case for why Verizon is making the investment.

He noted, for example, that 5G is a less costly than previous generation wireless technology on a unit-for-unit basis.

In addition, he said the “currencies within 5G are divisible.” He noted, for example, that some market segments might need massive burst capability or low latency but might not need capacity. Network slicing will give Verizon the ability to tailor offerings to specific segments seeking specific currencies. Segments might include business-to-business (b2b) or b2b2c (b2b to consumer), Dunne said. An example of the latter would be the online gaming industry.

Dunne also sees opportunities to use 5G to support tiered price plans, which he said have been successful for Verizon. He noted, for example, that Ultra Wideband commands a premium – customers either must sign on for a higher-tier plan or pay an extra $10 per month.

Verizon’s pricing structure has helped reduce churn and increased the percentage of people taking unlimited service, Dunne said. More than half of Verizon customers are now on unlimited plans, Dunne said. In addition, the carrier has several tiers within the unlimited category and is seeing more customers move to premium tiers within the unlimited category.

5G Home, a fixed wireless element of the overall Verizon 5G strategy, offers another opportunity to monetize 5G, Dunne said. The offering is viewed as an “incremental” new revenue opportunity that can accompany rollouts of 5G Ultra Wideband, he said.

verizon 5g strategy node
Verizon 5G Node (Source: Verizon)

Although some industry observers initially questioned 5G Home economics, Dunne noted that those economics are improving as the company has lowered the churn rate and gotten better at supporting self-installation. The company expects to roll out new customer premises equipment October 1 that will also improve the economics of the offering.

While rival AT&T has acquired video content companies to support its wired and wireless business, Verizon has been creating partnerships with video content companies such as Disney, and Dunne sees those partnerships paying off, not only in luring customers but also in obtaining better content deals with the content providers, Dunne said.

Dunne made his comments about the Verizon 5G strategy at the BofA Securities Media, Communications and Entertainment Conference, which was conducted as a livestream.

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