Verizon Ahead of Schedule in Rolling Out 5G, Though Q4 Disappoints Some
Verizon is 18 months to two years ahead of schedule on deploying 5G, CEO Hans Vestberg said Tuesday amid Q4 results that disappointed some. The carrier added more wireless subscribers than expected, with profit down and continuing losses of Fios video subscribers.
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The carrier added a net 653,000 postpaid wireless subscribers, about double analyst estimates. It lost 46,000 Fios video subscribers, compared to 29,000 and added a net 54,000 Fios internet customers. Profit decreased to $1.94 billion, from $18.8 billion, a year ago when it recorded a $16.8 billion one-time benefit from the U.S. tax overhaul. With its 5G build ramping up, Verizon expects to spend $17 billion to $18 billion on its network in 2019, compared to $16.7 billion last year. The company forecast revenue growth in the “low single-digits” this year, with flat underlying earnings.
Vestberg said Verizon will be the industry leader on 5G: "We don’t wait for the future, we build it.”
It's concentrating on the four cities where it launched a fixed wireless product last year and is waiting for customer-premise equipment for the home, Vestberg said. It went live in October in parts of Houston, Indianapolis, Los Angeles and Sacramento (see 1810010028).
“The first focus for the industry is actually to do a chipset for smartphones,” Vestberg said. The first handsets will come out in the first half of this year, Vestberg said. Verizon isn’t disclosing “where it is” on 5G deployment, Vestberg said. “We’re deploying as fast as we can” and has been putting in place fiber and working out agreements with cities for several years, he said. “For competitive reasons, I won’t talk about it,” he said: “What is important to understand is the lead that Verizon has on 5G.”
Vestberg called 2018 a year of firsts for Verizon. It was first to complete an overlay of data transmission on 5G global standards, to complete a 5G data session on a smartphone and to commercially deploy, he said.
Revenue was “soft” on wireless average revenue per user pressure, New Street’s Jonathan Chaplin wrote investors. “FiOS broadband adds and video losses were both a little better than expected, which will cause some concern for Altice and Charter,” Chaplin said. “Broadband and pay-TV markets [may] do better this quarter; Verizon’s better trends probably didn’t come at the expense of Cable.”
“Perhaps the best thing that can be said about Verizon is that it isn’t AT&T,” said Craig Moffett of MoffettNathanson. “It is simpler. It is growing faster. It is less levered, and, as a result, it is viewed (justifiably) as less risky.”
“The backdrop for wireless couldn’t be better, yet the outlook was uninspiring,” said Macquarie’s Amy Yong. She warned of a tougher competitive landscape ahead for Verizon.