Guest Editorial
By Jennifer Fritzsche, Managing Director at Greenhill & Company | Reprinted with permission from Digital Infrastructure Investor.
Knock, knock, knock……CABLE GUUUUUYYYYYY! While this Super Bowl is being called the Crypto Bowl given the ads starring Tom Brady to Larry David, my highlight (by a wide margin) was the Verizon ad with the one and only Jim Carrey.
While I realize that many of the Super Bowl audience may not even remember this movie (scary as that is), for me it had a personal history that has nothing to do with Jim Carrey or Ben Stiller. Why? Seeing the ad, I was immediately brought back to about five years ago (maybe even more) when I was an analyst following Verizon. During the event, Verizon offered a demonstration as to what their fixed wireless offering could be with spectrum assets it had just acquired from the (almost bankrupt) Straight Path and XO Communications. At the time both of these acquisitions were somewhat headscratchers. However, when the industry went through mmWave spectrum auctions and VZ backed up the proverbial ‘mmWave truck’, the path could begin to be seen. But, as in all things in life, this path took many twists and turns. Yet, the focus was always there. As evidence of this, I recall an interview I did with one of the former Verizon C-Suite executives. When I asked what all these mmWave moves meant, his answer was telling: “Jennifer, it is very simple: it is the un-cabling of cable!”
So, looking through this historical lens, it is easy to see why THAT Super Bowl ad was especially significant to me. Now the game really gets interesting……
As we know, Verizon has begun breaking out their fixed wireless access (FWA) sub gains as part of their quarterly reports. While skeptics may say they are doing so just because growth in the ‘traditional’ wireless channel has stalled, a bigger plan is indeed there. Recall, last fall at an investor conference, CEO Hans Vestberg said Verizon is looking to deliver a “full nationwide broadband offering.” He noted that: “Ultimately our goal is … to address the full market of broadband … we can come quicker… It’s the next generation of broadband. That’s how we see it.”
The word ‘nationwide’ is an important and very purposeful one. FWA gives Verizon the ability to extend its broadband “touchpoints” with customers well beyond their seven-state franchise footprint in the Northeast of the U.S. Importantly, Verizon has 91MM+ retail post-pay high demographic wireless customers who may be hungry for another broadband ‘touchpoint’ than their incumbent cable provider.
For those of us who have followed the space for a LONG time, we all know the ‘wireless/wireline bundling’ thesis has been talked about a lot with very little tangible evidence to support it. But this time it just may be different. History could show that Mr. Carrey’s presence on that big stage last Sunday could be the exact moment investors (and, more importantly, customers) began to appreciate that this ‘ULTRA’ important product should be taken a lot more seriously.
By Jennifer Fritzsche, Managing Director at Greenhill & Company
Jennifer Fritzsche is Managing Director at Greenhill & Company. She focuses on the North American Communications Services & Infrastructure spaces. Prior to this role, Fritzsche was Managing Director and Senior Equity Analyst at Wells Fargo Securities for 25 years where she focused on the Telecommunication Services, Cable, Data Center and Tower sectors. During her tenure at Wells Fargo, Jennifer received numerous awards including top rankings from Institutional Investor in the Communications Infrastructure space for each of the last four years (2017 – 2020).
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