Verizon today announced its Q2 2021 earnings results through which it provided updates on its i) 5G network roll-out, adoption, and new business lines, ii) Fios fiber broadband business, and iii) capital expenditures, with particular detail on C-band.

Verizon’s 5G Update – Q2 2021

5G Phone Adoption

Verizon’s subscriber base using 5G-capable devices rose to ~20% of its customers as of Q2 2021. Furthermore, the majority of these 5G-capable devices are able to receive C-band frequencies (e.g., iPhone 12).

5G Ultra Wideband (High-Band or mmWave)

Verizon anticipates that high-band (mmWave) 5G will represent 5% to 10% of its network traffic in most dense urban areas by year-end 2021. Specifically, this high-band (mmWave) 5G ‘share’ will be driven by three factors:

  1. Verizon’s deployment of more high-band (mmWave) sites via small cells, throughout 2021
  2. More customers using 5G-capable devices
  3. Customer data traffic activity reverting closer to pre-pandemic levels

Overall, Verizon intends to deploy an incremental 14k+ high-band (mmWave) small cell sites in 2021. Therefore, by year-end 2021, Verizon will have 31k+ high-band (mmWave) cell sites online, using small cell infrastructure. As of Q2 2021, Verizon notes that its network deployment is “running well-ahead of schedule, for the 14k sites, through the first-half of the year”.

5G Home (Fixed Wireless Access)

Verizon’s 5G Home, which is its fixed wireless access (FWA) product, is currently available in 47 markets of the United States. This product uses high-band (mmWave) spectrum, to offer average download speeds of 300 megabits per second. By the end of 2021, Verizon expects to cover 1 to 2 million homes with its high-band (mmWave) 5G Home offering.

Additionally, during the quarter, Verizon launched its new Internet Gateway router, which is compatible with C-band spectrum (i.e., mid-band frequencies).

5G Business Internet

Verizon recently launched its 5G Business Internet product, which offers broadband services to enterprises via high-band (mmWave) spectrum. As of Q2 2021, Verizon notes that it has expanded 5G Business Internet to parts of 42 cities.

Verizon Fios Fiber Update – Q2 2021

Fios, Verizon’s brand for its 100% fiber optic broadband service operates in nine states in the Mid-Atlantic and Northeastern United States. During Q2 2021, revenues for Fios increased to $2.9bn, up 5.4% year-over-year. Specifically, drivers of this growth were i) continued broadband subscriber growth and ii) further uptake of 1 gigabit per second speed tiers (i.e., higher ARPU).

For Q2 2021, Fios Internet had net customer additions of 99k (consumer and business). Moreover, during the trailing 12-months, total Fios Internet net customer additions was the highest Verizon has experienced since 2015. In turn, Fios’ 6.7 million Internet customer base is 7% higher than a year ago.

Capital Expenditures – Guidance for 2021

For full-year 2021, Verizon expects to have capital spending be in the range of $17.5bn to $18.5bn, which includes:

  • 5G High-Band (mmWave): further expansion in new and existing markets
  • 4G/LTE Densification: wireless network densification to manage future traffic demands
  • Fiber: deployment of fiber infrastructure to supply backhaul for its 4G/LTE and 5G wireless networks and for Fios fiber builds

C-band – Capital Expenditures

Recall that Verizon’s capital expenditures related to the deployment of the company’s C-band 5G network will be in addition to the $17.5bn to $18.5bn amount, noted above. At Verizon’s 2021 Investor Day the company disclosed that it would spend an incremental $10bn of C-band capital expenditures from 2021 to 2023. Of this total, Verizon intends to deploy $2bn to $3bn during 2021.

During the first-half of 2021, Verizon spent $160m+ in C-band capital expenditures. Additionally, the company has placed orders for ~$1.4bn of C-band related equipment year-to-date.

By year-end 2021, Verizon anticipates that it will equip 7k to 8k towers with C-band antennas and the appropriate connectivity for its 5G network.

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