T-Mo’s Neville Ray says Verizon’s mmWave-first 5G strategy ‘will come back to haunt them’

Analysts pressed Verizon on millimeter wave 5G network coverage during sell-side analyst meeting

T-Mobile US Vice President of Technology Neville Ray is confident in the carrier’s 5G “coverage leadership.” Speaking recently at the virtual BCG/New Street Research 5G Conference, Ray touted the reach of T-Mo’s low-band 600 MHz 5G network to 270 million PoPs over 1.4 million square miles, and noted the rapid pace of deployment of 2.5 GHz 5G–37 million PoPs this week, 100 million by year-end and 200 million by the end of 2021. 

And Ray didn’t mince words in assessing T-Mobile’s positioned as compared to AT&T and Verizon. AT&T and Verizon have used dynamic spectrum sharing to claim “nationwide” 5G coverage while the former has some dedicated low-band 5G market and latter is working toward of goal of millimeter wave 5G in 60 markets by the end of the year. 

Tying 5G adoption to the recently release of the iPhone 12, which has sub-6 GHz and millimeter wave 5G support across all four models, Ray said AT&T and Verizon customers “opening up that iPhone 12 box right now…[are]going to be pretty disappointed.”

Specific to Verizon’s millimeter wave service, he said, “Customers are just not finding it…I think [Verizon is] really over their skis. I think Verizon is in a difficult position and I think it will come back to haunt them. This is our time. We’ve spent a long time leveling the playing field on LTE coverage with Verizon and AT&T. Now we’re in this position to move ahead, to jump ahead. I honestly think the Verizon and AT&T strategies are in disarray at this point in time…Your head spins really.”

Verizon has taken a millimeter wave-first approach to 5G deployment, showing multi-gigabit-per-second speeds and using the slogan “5G built right.” T-Mobile has hit home the point that multi-gig service isn’t particularly meaningful if it’s not widely available. “The over promise and over commit and this millimeter wave thing…it’s mythical,” Ray said, alluding to a recent analyst event where he reckoned Verizon is “trying to get out of that story…but they have not connected that with their advertising machine.” 

Beyond a consumer offering, Verizon has tied millimeter wave and mobile edge computing, which it is actively building out with AWS and Microsoft, to enterprise service revenues expected in 2022. Verizon is also working with Corning and Samsung on providing in-building millimeter wave solutions. 

Again referencing Verizon’s analyst meeting, Ray said Verizon backpedalled on millimeter wave as a coverage play. “They said this is a capacity layer. It was never planned to be a coverage layer. They should go back and play some of the tape. You’ve got to be clear with consumers. They’ve got to fight but the way they’re fighting right now is a little bit of a head-turner for me.” 

Now, to Verizon’s Nov. 11 virtual Sell-side Analyst Meeting. CEO Hans Vestberg noted that its millimeter wave 5G, branded as Ultra Wideband, is up in 55 markets with the goal of 60 by year-end. “And that’s, of course, the capacity and experience layers that we’re building right now,” he said, according to a transcript provided by Verizon

CTO Kyle Malady presented a bar graph (more on that later) comparing 2019 to 2020 Ultra Wideband build out. Noting headwinds created by COVID and jurisdictional approvals, he said, “In some cases, we’re putting on several hundred Ultra Wideband sites per day, and we’ve built a machine to continue this going on. And what you’ll see is we continue to ramp this up, put this network out there. More people will be able to enjoy the Ultra Wideband network as we continue to scale this thing out.”

As to the geographic focus of those deployment, Malady said it’s “in the areas of highest utilization, that’s where we’re starting our focus on Ultra Wideband… it’s where the people are, it’s where the density is. It’s where I need capacity. It’s where people can experience these great, great capabilities.” 

David Barden of Bank of America/Merrill Lynch asked Malady, “You showed a slide with black and red bars, demonstrating expansion of the 5G Ultra Wideband and with no y-axis. I think that given you guys are advertising this as the key differentiator between Verizon and everyone else, it would be hugely helpful for people to understand what those bars really mean in terms of addressable market, addressable population coverage? What does 5G Ultra Wideband really deliver for Verizon today?”

Malady responded that that wasn’t a question, rather a comment or request then said, “That is discrete data that I showed you there. I mean that is our ramp in terms of number of nodes that we are building and we’re putting on the air and integrating into the network, month after month. I think my idea there was just to show you that…we’re building a factory that’s going to pump these things out and is really going to accelerate putting these things out there. As you can imagine, right now in COVID, it’s not exactly easy to get a permit to do anything. So the team is overcoming that and we continue to accelerate our growth, and that’s going to continue.” 

The press continued from Craig Moffett of MoffettNathanson. On Ultra Wideband coverage, “Maybe you could put it into just sort of time on the network terms, if you can’t quantify the y-axis for us. I’ve seen reports that say, today, it’s 1% of the time. But if I look out 5 years, what’s your expectation for a typical user on how much of the time that they’re on the network they’re actually going to be in a range of a small cell using millimeter wave such that they get the real Ultra Wideband experience?” 

Malady came back: “We’re targeting areas that are capacity constrained, if you will, right now, and other areas that we could really show off the tech, i.e., stadiums and arenas. Unfortunately, COVID threw us a bit of a curveball with those type places…Iif you look at people’s typical usage, you’re generally in the same area a lot of the time. So if you — if we put the capacity in areas that people are most of the time, we’re going to get a lot of usage on millimeter wave as we start penetrating the base with these devices that are capable. So in the near term, we’re probably looking for about 5% of our overall usage to be on millimeter wave, but that’s going to ramp significantly as we continue to ramp our deployment, and we continue to see devices in the network to do this.” 

Back to Ray, discussing the pace of 5G deployment T-Mobile is following: “I’ve never seen a team executing as well on a build program. I think this is the biggest thing going on globally right now outside probably of China. I don’t think there’s a level of build out and pace that’s underway anywhere like this. I think it worries the literal crap…out of my competition. And I like that. They’re incredibly concerned about customers and what customers are going to understand 5G is all about.”

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