Verizon CFO: 5G experience has to be better than 4G ‘to justify a price differential’

Verizon projects 5G mobile service revenue in 2021

As competitors T-Mobile US and invest in deploying low-band 5G, Verizon continues to invest in deploying its millimeter wave-based mobile 5G service. To be clear, Verizon has said it will use dynamic spectrum sharing to extend 5G NR into lower bands but, for now, the focus is on millimeter wave and showing customers multi-gigabit-per-seconds handset speeds.

CEO Hans Vestberg has previously said the operator expects mobile service revenues from 5G in the 2021 timeframe and CFO Matt Ellis, speaking this week at the Morgan Stanley Technology, Media and Telecom Conference, provided some details on that path to creating 5G service revenues.

Noting Verizon recently passing a 4 Gbps downlink speed using eight-channel carrier aggregation, Ellis said 5G is evolving and “continues to improve. That type of experience, we believe we have the opportunity to have a different price point. If 5G doesn’t offer a differentiated experience to 5G, there’s limited upside to charge a customer more.”

Ellis listed four strategic priorities for 2020: strengthen the existing consumer and enterprise wireless businesses; leveraging wireless, fiber and edge assets to create revenue growth; maintain financial discipline; and “making sure we have a purpose-driven company with engaged employees and a customer-centric mentality.”

Verizon has mobile and fixed 5G services available in parts of more than 30 markets and in NFL stadiums and arenas that host NHL and NBA matches. Ellis addressed plans around DSS, which are consistent with Verizon’s ongoing narrative around market need.

“We’re very excited about dynamic spectrum sharing,” he said. “It gives us the opportunity to use spectrum more efficiently than we ever have before.” Ellis said testing with Ericsson is going well, the technology can be added to the network in the middle part of the year, “then it’s a commercial decision.”

Ellis also discussed Verizon’s plans for tapping 3.5 GHz CBRS spectrum, the FCC’s move to auction C-band frequencies later this year and the not-yet significant impact of coronavirus on Verizon’s device or network equipment supply chain. Click here to listen to a webcast of the full presentation.