Verizons 5G

by Ian Harvey
August 20, 2019

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Verizons 5G, being the next-generation network, is at the core of its Communications’ strategy, and its CEO is excited about the innovations that their faster speed, lower latency, and greater capacity in high-density areas will spur.
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Verizons 5G, being the next-generation network, is at the core to its Communications’ strategy, and its CEO is excited about the innovations that their faster speed, lower latency, and greater capacity in high-density areas will spur.

Verizons 5G millimeter wave network will face perhaps its biggest coverage test yet when it launches in “parts of” New York City on September 26th. Yesterday Verizon Communications Inc. (NYSE:VZ) announced that 5G service will reach areas of uptown, midtown, and downtown Manhattan, along with select parts of Brooklyn, the Bronx, and Queens.

So, what is 5G?

5G is a capital improvement project the size of the entire planet, replacing one type of wireless architecture created this century with another one that aims to lower energy consumption and maintenance costs. It’s also a huge gamble on the future of transmission technology, doubling down on consumers’ willingness to upgrade.

The true purpose of 5G wireless is to produce a global business model where expenses are lower and revenue from services is higher, on account of the presence of more and greater services than 4G could provision for.

With so many technologies under the 5G umbrella -- home broadband, office broadband, home television, internet of Things, in-vehicle communication, as well as mobile phone -- there's no guarantee that, when it comes time, any consumer will choose the same provider for each one unless that consumer is willing to sign a contract beforehand.

5G is a collective bargain between the telecommunications industry and society. To allow for anything close to evenly distributed coverage over a metropolitan area, the base stations containing the transmitters and receivers (the "cells") must be smaller, much lower in power, and much greater in number than they are today. Essentially, the new cell towers must co-exist with the environment.

Verizons 5G

That’s why Verizons 5G is stepping up their 5G branding efforts now, including rolling out preliminary 4G upgrades with 5G monikers, and re-introducing the whole idea of 5G to consumers as a fuzzy, cloudy, nebulous entity that encapsulates a sci-fi-like ideal of the future.

“The general purpose technology for the Fourth Industrial Revolution is actually the ambiguous sort of connectivity that 5G can bring," admitted Verizon CEO Hans Vestberg.

Verizons 5G with their"First on 5G" began with the October 2018 rollout of what's being called 5G Home -- a broadband Wi-Fi service that bundles wireless phone with no-longer-cable TV service. In the test cities where it was first deployed, Verizon’s 5G Home utilized wireless spectrum that is indeed being earmarked for 5G. Yet it involved a grade of equipment only capable of 300 megabits-per-second (Mbps) throughput, that would eventually need to be upgraded to 1 gigabit-per-second (Gbps) for it to qualify as 5G technology.

Earlier this summer, Verizons 5G had expanded to include parts of Atlanta, Detroit, Indianapolis and Washington, DC. Once the network is active in NYC, Verizon will have 5G in 11 cities across the US. The carrier hopes to launch 5G in more than 30 cities nationwide by the end of the year. While not included in next week's rollout, it's worth noting earlier in the month Verizons 5G was turned on across the Hudson in New Jersey at MetLife Stadium.

“Our goal is to provide 5G network coverage to more than 50 percent of the US by the end of 2020,” Verizon said in a press release.

Where to now?

Verizon is the largest provider of wireless services in the U.S. It also sells wired services to consumers in the Northeast and business services globally.

Verizon is much more exposed to the U.S. wireless market than AT&T. The telecom firm gets nearly 85% of adjusted earnings from its wireless business.

Chief Executive Hans Vestberg has embarked on a four-year, $10 billion cost-cutting effort.

Verizon stock usually attracts income-oriented investors. If Verizon’s 5G wireless services reignite earnings and revenue growth, however, its shares should have a much greater appeal to growth investors.

Amid stock market volatility and talk of negative interest rates reaching the U.S., Verizon climbed well above its 50-day moving average in early September.

Further change expected? The Trump administration expects an economic boom from 5G wireless services. It's making more spectrums available for 5G wireless.

Verizon has been aggressive in building out 5G wireless infrastructure. Verizons 5G buildout could reignite currently anemic earnings and revenue growth, say Verizon stock bulls.

Verizons 5G growth is expected where 5G wireless will have a role in manufacturing automation, cloud gaming, autonomous vehicles, drones and remote health care services.

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Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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