Verizon today announced its Q3 2021 earnings results through which it provided updates on its i) 5G network roll-out, ii) new targets for its fixed wireless household passings, iii) Fios fiber internet business, and iv) capital expenditures, with particular detail on C-band.
Verizon’s 5G Update – Q3 2021
5G Phone Adoption
Verizon’s subscriber base using 5G-capable devices rose to more than 25% of its customers as of Q3 2021. Furthermore, the majority of these 5G-capable devices are able to receive C-band frequencies (e.g., iPhone 12 and 13).
5G Ultra Wideband (High-Band or mmWave)
Verizon is ‘on track’ to have high-band (mmWave) 5G represent 5% to 10% of its network traffic in most dense urban areas by year-end 2021.
In 2021, Verizon intends to deploy an incremental 14k+ high-band (mmWave) small cell sites. As of Q3 2021, Verizon notes that it is “on track to meet or exceed” its target to end 2021 with 30k+ high-band (mmWave) cell sites, using small cell infrastructure.
Fixed Wireless Access (FWA)
Verizon’s 5G Home and 5G Business Internet, which are its fixed wireless access (FWA) products, are currently available in parts of 57 cities in the United States. These products use high-band (mmWave) spectrum to offer average download speeds of 300 megabits per second. As of Q3 2021, Verizon covers over 2 million households with its high-band (mmWave) 5G Home offering.
Additionally, by leveraging C-band 5G spectrum (i.e., mid-band frequencies) and 4G/LTE frequencies, Verizon now targets 15 million households passed with FWA by year-end 2021. As of Q3 2021, Verizon already covers 11.6 million households with its various forms of fixed wireless access (FWA).
Verizon – Total Broadband Availability Q3 2021
Furthermore, during the quarter, Verizon had 55k net customer additions across all its FWA broadband services. Indeed, this brings the company’s total FWA subscribers to ~150k as of Q3 2021.
Verizon – Total Broadband Net Adds Q3 2021
Finally, Verizon notes that it has a similar average revenue per user (ARPU) for its FWA services, as its wireless segment.
Verizon Fios Fiber Update – Q3 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 Q3 2021, revenues for Fios (consumer and business) increased to $3.2bn, up 4.7% year-over-year.
|$ in mm||Q3 2021||Q3 2020||% Change|
For Q3 2021, Fios Internet had net customer additions, in its consumer and business segments, of 104k. Indeed, this represents 40k fewer net customer additions during the quarter, as compared to Q3 2020.
|in 000s||Q3 2021||Q3 2020||% Change|
|Fios Internet Net Adds||104||144||-28%|
Overall, Fios Internet’s 6.8 million consumer and business customer base is 6.2% higher than a year ago.
|in 000s||Q3 2021||Q3 2020||% Change|
|Fios Internet Connections||6,842||6,442||6.2%|
Finally, Verizon Fios Internet is currently “open for sale” to 16.4 million households, with the company adding ~400k passings during 2021.
Capital Expenditures – C-band In-Focus
For full-year 2021, Verizon expects to have capital spending be in the range of $17.5bn to $18.5bn. However, Verizon’s capital expenditures related to the deployment of its C-band 5G network will be in addition to this figure.
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.
Verizon – Q3 2021 Network Updates
During the nine months ended September 30, 2021, Verizon spent $1bn+ in C-band capital expenditures. Additionally, the company has placed orders for ~$2bn 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. As a result, Verizon is ‘on track’ to have 5G service on C-band deployed to 100 million customers (PoPs) across the United States by Q1 2022.