Expanding on comments made by CFO Fran Shammo last month, Verizon CEO Lowell McAdam on Tuesday said that the carrier’s 5G efforts are concentrated on developing a fixed wireless product that will deliver a hefty return on investment.
McAdam said he “wouldn’t argue” with industry players working on standards who say mobile 5G won’t make its debut until 2020, but noted there’s a difference between mobile 5G and fixed wireless 5G services.
According to McAdam, the prospective profitability of an initial fixed wireless 5G product is self-evident and will help the carrier transition to mobile 5G down the line.
“There’s a distinction between 5G in a fixed wireless environment versus a mobile environment,” McAdam said. “The use case for me that gets you over the hump on investing in the technology is the one that’s right in front of us right now and that’s a fixed wireless play…That gives you all the return on capital that you need to invest in that technology, and the rest of it’s going to be gravy.”
McAdam said Verizon’s initial fixed wireless 5G tests at its Basking Ridge, New Jersey, headquarters have shown promise, delivering speeds of up to 1.8 gbps.
McAdam said there is no limitation on where Verizon could make fixed wireless 5G services available thanks to the company’s recent acquisition of XO Communications’ metro fiber rings. The carrier could also deliver fixed 5G services to rural areas by using cell towers as spokes for fiber lines into communities, McAdam said.
Rather than going the full distance with fiber, McAdam said fixed wireless would allow Verizon to get within 1,000 meters of a home or office building and connect to the network remotely using a 5G router. McAdam said the strategy would save on both costs and service delivery times.
“Once you go wireless, you don’t have to run coax, you don’t have to do any of those high-labor-intensive activities,” McAdam said. “So you light up service overnight.”
According to Shammo’s comments in April, Verizon is looking to deploy a fixed wireless pilot next year. In March, Shammo said the company was still reviewing its business options for packaging the service.