While others in the broadband industry are chasing the fiber opportunity, Verizon has placed its bet on fixed wireless access technology. In a strange way, though, Verizon Business CEO Sowmyanarayan Sampath said expansion of its fixed wireless service could actually drive it to deploy fiber in additional markets beyond the 60 it covered through its One Fiber initiative. Wait, what?
Verizon launched One Fiber several years ago, seeking to build out its own fiber backbone to cut lease costs and serve several of its different business lines. To date, it has deployed some 50,000 miles of fiber across 60 markets – primarily NFL cities and tier-1 metro areas – and transitioned half of its cell sites to run on this infrastructure, Sampath said. It is also using One Fiber assets to deliver wholesale dark fiber and enterprise services.
Sampath said the total addressable market for those services alone in the markets it serves is “really big,” noting it can build out last mile fiber to reach near-net opportunities within 30 to 60 days.
It could, in theory, use its One Fiber backbone to expand its Fios fiber-to-the-home offering. But Sampath said it’s not interested, in part because of the $45 billion it recently spent to acquire more C-Band spectrum. Instead, it is squarely focused on growing its fixed wireless access presence. And as it lights up more millimeter wave and C-band spectrum to grow the FWA business, that could drive it to deploy more fiber backbone infrastructure in markets where it makes financial sense.
“It’s purely a ROI calculation,” he said. “We think as our fixed wireless access and mobility business grows we’re going to need more fiber and we like to self-provision our own fiber.”
Moving MEC goalposts
Beyond mobility and FWA, Sampath pointed to mobile edge computing (MEC) as a third growth vector for the company. Indeed, Verizon has already partnered with Amazon Web Services, Microsoft and Google to integrate its network with their cloud stacks and has revenue-sharing partnerships with each.
But it seems the MEC business is taking a bit longer to ramp up than Verizon originally expected. Back in 2020, Verizon CEO Hans Vestberg said it expected to see meaningful revenue from MEC in 2022. During an investor day event in March 2022, CFO Matt Ellis said its public MEC business would continue to scale in 2022 with “more significant revenue contribution starting in 2023.”
Sampath, however, indicated this week it doesn’t expect to see meaningful revenue from MEC until the second half of 2023 or early 2024.
“On the MEC, what we are finding is demand is taking a little longer to go. And part of that is we are having to work back and integrate deeper into their operating system. So, it’s going to be much stickier when it does happen, but it’s going to take a little longer,” he concluded.
Ellis said in March Verizon is looking to MEC to drive $1 billion in growth by the end of 2025.
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