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Verizon hits 5G milestone as Vestberg takes control of consumer division

US operator Verizon has given itself an early Christmas present by hitting its latest 5G rollout target a month ahead of schedule, but still faces some senior staffing challenges.

The company revealed that its 5G Ultra Wideband services – that’s its full 5G offer, based on C-band and mmWave spectrum – now covers 175 million people, a target it was shooting for by the end of this year. It was able to accelerate its rollout plan by paying extra for early access to the C-band frequencies occupied by satellite companies in March this year. That raised a few eyebrows, given how much Verizon spent in the much-hyped C-band spectrum auction of March 2021, but when you’re already on the hook for almost US$53 billion, what’s an extra $170 million?

That extra cash has enabled Verizon to trumpet reaching its latest coverage goal earlier than planned, as well as declaring that its C-band rollout is 13 months ahead of its original schedule, so it’s money well spent… at least as far as its publicity teams are concerned.

For US consumers the important detail in this latest announcement is that the telco has committed to offering nationwide 5G UWB in the first quarter of 2023. Given that coverage is currently at just over half of the population, that’s a pretty aggressive rollout plan.

“As proud as I am to have crossed this milestone, I am equally proud of the way we are building our network – with the most advanced technologies, industry leading security, a robust fiber underpinning and a robust and varied spectrum portfolio,” said Verizon chairman and CEO Hans Vestberg.

Doubtless Vestberg already had his finger on the pulse when it came to his company’s 5G network rollout, but he’s about to get a bit closer to the workings of its Consumer business.

Vestberg has assumed responsibility for leading the Consumer Group following the (presumably) unexpected departure of its CEO Manon Brouillette, who had been in the role for less than a year. She replaced Ronan Dunne in January, having joined Verizon as recently as July 2021 as deputy CEO and COO of its consumer business.

Brouillette seemed like a fairly safe pair of hands, her previous role being that of president and CEO of Canada’s Vidéotron. But clearly all did not go to plan.

Indeed, while Vestberg did the usual trick of thanking Brouillette for her contribution to the company, his fairly terse statement on the matter suggested that the Consumer business is not where he wants it to be.

“My immediate focus for the Consumer Group will be on driving a closer consistency between the top quality network product we’re bringing to market and the operational results we’re producing,” he said.

The numbers back up Vestberg’s stance.

Verizon reported an increase in churn in its most recent quarterly results, losing a net 189,000 wireless retail postpaid phone customers. It blamed the losses on “recent pricing actions,” which is a not-particularly subtle way of saying it put prices up and customers voted with their feet.

The Consumer Group reported revenue growth during the quarter to $25.8 billion, accounting for three quarters of the telco’s top line. But margins were down; operating income fell by 3.2 percent to $7.3 billion, while EBITDA was essentially flat.

“The pricing actions and the inclusion of TracFone results more than offset pressures from higher promotional activity and the impact of inflation,” Verizon said. It started including TracFone in its financials at the back end of last year.

Given that economic pressures are unlikely to ease in the near term, there’s little wonder Verizon is worried about its Consumer unit. It is ploughing tens of billions of dollars into 5G and that’s just a part of the overall business. It can’t afford to let results slide.

 

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