MoffettNathanson senior MD Craig Moffett issued a damning assessment of Verizon’s fixed wireless access (FWA) strategy after the operator’s CEO Hans Vestberg talked up subscriber gains made during Q2.
Verizon added 218,000 consumer FWA subscribers and 160,000 business customers to bring its total to 3.8 million, up nearly 69 per cent year-on-year.
FWA revenue came in at $514 million, an increase of more than $200 million.
On Verizon’s earnings call, Vestberg referenced a continued roll-out of C-Band to suburban and rural areas, with the spectrum deployed across 60 per cent of its planned sites.
Nearly half of Verizon’s network traffic runs on its 5G ultra-wideband service which uses C-Band and mmWave, up from 36 per cent in Q2 2023.
“Clearly, we have a great network that can ingest more customers over time,” Vestberg stated, adding it plans to continue scaling the FWA business “along with the private networks, while driving mobility growth”.
“Our ongoing C-Band expansion will be crucial in supporting these efforts.”
CFO Tony Skiadas said the operator expects to generate more than $2 billion in FWA revenue this year, “with prospects for continued healthy growth”.
Moffett was not convinced, stating in a research note that due to low availability “there are more holes than cheese” in Verizon’s C-Band network and citing the low propagation characteristics of the spectrum.
Research by analytics company Opensignal showed Verizon customers are connected to 5G 7.7 per cent of the time compared to 67.9 per cent for T-Mobile US and 11.8 per cent AT&T.
Moffett explained Verizon has never come close to capturing as many quarterly FWA net additions as T-Mobile, particularly in the residential market.
He stated the issue for Verizon is the availability of FWA rather than capacity.
“Fixing the 5G coverage problem will require money. Lots of money.”
Q2 numbers
Verizon reported 148,000 wireless retail post-paid phone additions, in part driven by the launch of its customisable myPlan tariffs in May 2023.
Skiadas noted more than 30 per cent of Verizon’s consumer phone lines are now on myPlan tariffs and expects the figure to “expand meaningfully going forward”.
Vestberg argued Verizon is the only US operator offering its customers savings on ten of the top streaming services.
The consumer business booked a net loss of 8,000 wireless retail post-paid phone users compared with 136,000 in Q2 2023.
Its prepaid net loss was 624,000, 410,000 of which related to the shutdown of the government-sponsored Affordable Connectivity Programme.
Wireless service revenue of $19.8 billion was up 3.5 per cent.
Revenue was flat at $32.6 billion, while net income dropped from $4.8 billion to $4.7 billion.
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