For 5G, the radio is a small piece of total network investment, Verizon CEO says

As AT&T and Verizon duke it out to launch commercial 5G services this year, and T-Mobile and Sprint work on a potential merger being pushed as key to delivering a third domestic 5G offering, the telecom space is also currently colored by the combination of network with content.

T-Mobile US is teasing a pay TV offering based on its acquisition of Layer 3. AT&T is battling the Department of Justice regarding the carrier’s acquisition of Warner Media and its holdings, including HBO, the Turner networks and a number of sports offering. And Verizon, which is planning to launch 5G with a residential broadband offering has partnered with YouTube and Apple to provide a network/content bundle. But note the difference. AT&T bought the former Time Warner, whereas Verizon is partnering.

In a recent interview on CNN, Verizon CEO Hans Vestberg, formerly the CEO of Ericsson, responded to questions around the content question, and took issue with the descriptor of a network as a “dump pipe.”

“First of all, dumb pipe is a very, very bad word because it’s such a high technology that we are talking about…We think our technology and our network is our asset. I think we have another way to deal with our assets. Our distribution is fantastic. So I think people will take different strategies. They’re not doing wrong, it’s just we believe in our assets.”

Asked directly if Verizon was at a competitive disadvantage due to not owning “premium content,” Vestberg said, “No. I think that we’ll compete with what assets we have in the market. We are going to see differentiation from different carriers. It’s nothing strange.”

In terms of assets, Verizon is offering 5G in four markets by the end of this year—Sacramento, Los Angeles, Houston and Indianapolis. To get to that point, “We hav seen, the last couple of years, the very seamless investment in capex. Even though we’re investing lots in 5G right now, you need fiber, you need passive equipment, you need switches, you need a lot before you come to a radio-based station, which is a small piece of the total investment.”




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