Verizon Senior Vice President of Network Strategy & Planning Adam Koeppe took the opportunity yesterday to respond to MoffettNathanson, the financial research firm that has expressed concern about the business case for the carrier’s fixed wireless 5G Home offering. At an event hosted by the same research firm, Koeppe also defended the Verizon 5G spectrum strategy, which MoffettNathanson also has questioned.
“We were flattered to have so much attention,” quipped Koeppe when MoffettNathanson Senior Research Analyst Craig Moffett asked him about the research firm’s economic analysis of 5G Home, which suggested that the offering was unlikely to be profitable.
MoffettNathanson researchers’ concerns were based, in large part, on the range they estimated that Verizon’s millimeter wave spectrum could support. The researchers based their findings on public sources of cell site information and Verizon’s own interactive portal that consumers in the carrier’s first four markets can use to determine if service is available at their address.
Koeppe didn’t directly dispute those findings, but he suggested that the findings were not representative of the performance that 5G Home could be expected to provide long term. He noted, for example, that service in the initial four markets was based on a non-standard version of 5G technology developed by Verizon so that the carrier could get an offering to market before the standards process was completed.
That early technology has a “finite life,” Koeppe said, and is subject to “limitations” because no additional development is occurring for the technology. Verizon is using equipment that meets the 5G-NR standard for its mobile 5G service, which was launched after 5G Home in parts of Chicago and Minneapolis.
Another key difference between the service launched in the initial 5G Home markets and the service that Verizon expects to deliver more broadly is that the company used only 400 MHz of its 28 GHz millimeter wave spectrum for the initial launch but has an additional 400 MHz available in many markets. And while the company sent technicians to customer sites to turn up customers in the initial four markets, the company expects to use a self-install approach when it launches service more broadly in the second half of 2019.
Koeppe confirmed that Verizon continues to see a potential market of 30 million homes for its fixed 5G offering.
Verizon Spectrum Strategy
Verizon’s spectrum strategy also has come under attack in recent weeks, including from MoffettNathanson. Verizon has argued that millimeter wave spectrum is critical to supporting maximum 5G speeds, but critics say it would be too costly to broadly deploy service in the millimeter wave band. Those critics argue that mid-band spectrum is optimal for 5G deployments and question whether Verizon has sufficient mid-band spectrum holdings.
Koeppe noted that Verizon will deploy millimeter wave spectrum “on top” of existing networks operating in lower-frequency bands and will get an “immediate uplift.” He argued that this approach “will make 4G better” and support “a new experience on 5G.”
Eventually the company also will look at re-farming spectrum that is already in use and at that time, Koeppe said, dynamic spectrum sharing will come into play. As Verizon CEO Hans Vestberg explained recently, dynamic spectrum sharing involves using a single spectrum band to support multiple-generation services.
According to Koeppe, consumers are likely to be disappointed by any carrier that deploys 5G using just a 40 MHz swatch of spectrum – an apparent reference to T-Mobile – because the speeds will be unable to match what can be achieved when wider swaths are used.
Verizon’s national average spectrum depth is 115 MHz, Koeppe said, and that number is as high as 800 MHz in some markets, including Chicago and Minneapolis, where the company has launched mobile 5G service using millimeter wave spectrum. Those initial launches use 400 MHz of spectrum.
The discussion between Koeppe and Moffett was webcast and an archive is available.