Verizon (NYSE: VZ) dominated the C-band auction. VZ captured 100 percent of the 100 MHz in the A block and 40 to 100 MHz in the B block in all 406 partial economic areas (PEAs), giving it 140-200 MHz of mid-band 3.7 GHz contiguous coverage across the country.
In its 2021 Investor Day conference on Wednesday, the company shared its plans and outlook for its 5G network build utilizing the abundant C-band spectrum it won in FCC Auction 107.
This win more than doubles VZ’s mid-band spectrum holdings and gives it 161 MHz average C-band spectrum depth nationwide. Only T-Mobile’s 153 MHz at 2.5 GHz compares. Moreover, VZ secured 200 MHz in 158 mostly rural PEAs covering nearly 40 million people.
With the auction behind it, VZ is accelerating its 5G mobility network expansion. The company is allocating $10 billion for C-band capital expenditures over the next three years. This spend is in addition to VZ’s overall 2021 capex guidance of $17.5-18.5 billion that it expects to invest at comparable levels through 2023.
The company plans to install 7,000-8,000 C-band equipped cell sites in 2021, all on existing infrastructure.
At the same time, VZ is expanding its base of 28 GHz millimeter wave small cells, adding 14,000 in 2021, bringing the total to over 30,000 by year-end. The company said it expects to have 50 percent of all urban 5G traffic on mmW “over time.” To facilitate that, it is planning to connect over half of all its 4G and 5G sites to VZ-owned fiber in the next three years.
The first step, though, is to clear the C-band for 5G use. The 3.7-3.98 GHz part of the C-band is currently occupied by satellite operators that deliver TV, radio and cable programming to terrestrial broadcasters. (see, Rockin’ the C-band).
VZ paid $45.6 billion for the C-band spectrum and is contributing another $7.3 billion to the satellite companies for incentive payments and clearing costs. The Phase I clearing target, December 5, 2021, involves 60 MHz of A-block spectrum in the top 46 U.S. markets covering about 100 million people.
This is VZ’s ‘initial’ build period. By virtue of its A-block monopoly, the company is the sole beneficiary of the early clearing. Even with C-band cell sites installed in 2021, VZ cannot activate those sites prior to the clearing deadline.
Still, this gives VZ a competitive advantage over the other carriers that won B- and C-blocks but must wait until the Phase II clearing deadline of December 5, 2023. Phase II involves clearing A, B and C blocks in all 406 PEAs.
Once its ‘initial’ build period completes in early 2022, the company is projecting service and other revenue will grow by 2 percent.
Referring to its ‘scale’ build period in 2022 and 2023, C-band coverage will increase to more than 175 million people with an associated annual revenue increase of over 3 percent.
In its ‘nationwide’ build period in 2024 and beyond, after the remaining C-band is cleared, VZ will provide access to 5G Ultra Wideband service on C-band spectrum to more than 250 million people and is expecting over 4 percent of annual service and other revenue growth.
C-band spectrum also features in VZ’s 5G broadband strategy.
By the end of 2021, Verizon expects to cover nearly 15 million homes with its 5G Home fixed wireless access broadband service using both 4G and 5G. By the end of 2023, 5G Home service will be available to 30 million homes using 5G and a reduced proportion of 4G. By year-end 2025, VZ is targeting 50 million homes on 5G-only FWA service, using both C-band and mmW.
Kyle Malady, VZ CTO commented on the auction win, “We secured a game-changing amount of C-Band spectrum to go along with our leadership in millimeter wave spectrum. We’ve been planning for many months and are already working to make this the fastest deployment of new spectrum ever.”
VZ points out the availability of devices is not a gating factor. More than 70 percent of the 5G devices owned by customers today are C-band compatible, mainly its 5G flagship models – Apple iPhone 12, Samsung Galaxy S21 series and Google Pixel 5. All new 5G handsets that VZ offers postpaid customers will be C-band compatible. It expects to have more than 20 C-band compatible devices available by year-end 2021.
By John Celentano, Inside Towers Business Editor
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