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Verizon CEO fires back on T-Mobile 5G doubts – CNET

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Verizon’s CEO Hans Vestberg threw a few punches of his own Thursday in the 5G messaging wars. Responding to jabs from T-Mobile’s CTO Neville Ray, Vestberg told investors on the company’s quarterly conference call that his company will have “real 5G” that gives “the right sort of performance” in the “right moment” that customers expect from Verizon. 

The comments come a day after Ray expressed skepticism in a tweet over Verizon’s plans to add more cities to its 5G network. Ray said he wanted to see the coverage map in those cities, implying that the airwaves that Verizon is using in its 5G deployment won’t offer the kind of coverage that T-Mobile claims it plans to offer. 

Verizon announced Wednesday that it will add Atlanta, Detroit, Indianapolis and Washington, DC to its list of cities getting 5G. The company already has 5G offered in parts of Chicago, Denver, Minneapolis-St. Paul and Providence.

T-Mobile, Sprint and AT&T already offer 5G in some parts of the US. 

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Ray’s criticism of the Verizon network is based on the fact that Verizon has been focusing its deployment on very high frequency millimeter wave spectrum or mmWave. This spectrum can transmit vast amounts of data, but the range of the signal is very short, requiring a lot more small cell towers to be deployed to cover an area. Over a year ago, Ray called Verizon’s plan to use mmWave “unrealistic” because it would be way too expensive for the company to blanket the US with 5G using this spectrum.

He reiterated this point in his tweet on Wednesday evening. 

“What is Verizon’s ‘secret’ 5G plan to expand 5G coverage beyond the limits of mmWave?!” Ray tweeted, referring to the millimeter-wave high-band spectrum being used by Verizon for its 5G network.

“Verizon says they will have a ‘multi-spectrum strategy.’ So they don’t have one now… when will they have one? Tomorrow?!” he added in another tweet.

By contrast, T-Mobile plans to use a wide variety of spectrum in its 5G deployment, including low-band 600MHz spectrum as well as mid-band spectrum it plans to acquire from Sprint. The DOJ gave its approval of the deal last week when it came up with a plan for T-Mobile and Sprint to divest assets to satellite TV provider Dish in the hope it could replace Sprint as a fourth national wireless provider. 

AT&T has a similar strategy that includes using a mix of spectrum for 5G. Both AT&T and T-Mobile say they will cover the US with 5G by the end of next year. 

The benefits of the combination spectrum strategy is that it will allow for a lot more coverage, but the lower frequency spectrum also means slower speeds.

With the Department of Justice’s settlement with T-Mobile and Sprint to approve their merger, T-Mobile is set to bundle in a large swath of mid-band spectrum from Sprint, which it plans to use in its 5G network. Part of this settlement also sets up satellite TV provider Dish Network as a possible fourth major nationwide wireless carrier. T-Mobile and Sprint are required to divest some Sprint assets, such as Sprint’s prepaid business, to Dish, which the company will use to become a competitor in the wireless market. Dish has long had ambitions to compete in wireless, but this deal will accelerate those plans and could potentially change the wireless market’s landscape. Dish also has a large cache of wireless spectrum in a variety of frequency bands. 

Some on Wall Street speculate that Verizon, by comparison, may be spectrum constrained, given that much of its lower frequency and mid-band spectrum is already being used for 3G and 4G LTE service.  Vestberg tried to allay these concerns stating he was confident that Verizon has what it needs to compete in 5G.

“We are not disadvantaged,” he said. Instead, he emphasized the fact that 5G is still in its early days. The standards around 5G haven’t been finalized yet, and there are only a few handsets available that can even tap into 5G, he said. He added that it’s more important for Verizon’s customers to feel a real difference in performance when they access the 5G network rather than rebranding a service as 5G with only incremental benefits in terms of speed. 

He conceded in the long term, the company will repurpose its existing low-band and mid-band spectrum currently serving its 3G and 4G LTE networks to 5G. But he said, right now the company’s coverage map is well-positioned relative to the size of today’s 5G market and given the number of handsets available.   

“I inherited fantastic DNA in this company,” he said. “First, we do things and then we start marketing it.” 

He added, “There will be a lot of messaging in the market, but I’m confident we will execute on real 5G and give the right sort of performance to our customers in the right moment.”

In an earlier interview Thursday with CNBC, he said that he expects Verizon’s 5G service to cover 50% of the US population next year. But he noted that it won’t be until 2024 that at least half the US population will actually own a 5G handset. 

This debate over 5G coverage comes as Verizon announced it added more wireless customers than analysts expected in the second quarter of 2019. The largest US wireless carrier added a total of 245,000 phone subscribers during the second quarter of 2019. Analysts had expected it to add about 163,000 new phone customers, Reuters reported. 

The subscriber boost comes as Verizon began its roll out its next-generation 5G wireless network. 5G is not only about 100 times faster than 4G, but it also allows the new network to be more responsive ushering in new applications such as VR, AR and self-driving cars. 

Verizon activated its 5G network in Chicago and Minneapolis in April. Last month, it expanded the service to Denver and Providence. This week it announced it had added additional cities, including Atlanta, Detroit, Indianapolis and Washington, DC.

The company plans to have the service in more than 30 cities by the end of the year, including Boston, Charlotte, Cincinnati, Cleveland, Columbus, Dallas, Des Moines, Houston, Kansas City, Little Rock, Memphis, Phoenix, San Diego, and Salt Lake City.

“Verizon made history this quarter by becoming the first carrier in the world to launch 5G mobility,” said Verizon Chairman and CEO Hans Vestberg, in a statement. “We are focused on optimizing our next-generation networks and enhancing the customer experience while we head into the second half of the year with great momentum.”

Updated 8:08 a.m. PT: This story was updated with information from the quarterly conference call. 

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