Speaking at a Goldman Sachs & Co. conference Thursday, Verizon Communications Inc. (NYSE: VZ) CFO Fran Shammo addressed Verizon Mobile Virtual Network Operator (MVNO) deals with Comcast Corp.
"We knew they were coming... when we entered the agreement," he said.
But Verizon, as the wholesaler, believes it has an advantage. "A wholesale model is extremely profitable, because you remove the retail part," Shammo added.
However, the CFO made it clear that he expects Verizon's fixed wireless 5G, with 1 Gbit/s connections to the home, will take on cable and "or any broadband connection for that matter."
Shammo thinks it will be much cheaper for Verizon to deploy 5G than FiOS. "The cost benefit is pretty substantial, or at least we believe it is," Shammo said. He wouldn't, however, give any sense of what Verizon might charge for a 5G service.
Basically both technologies require that Verizon digs up the street if it doesn't have fiber in place already. "We're doing that in Boston now," Shammo said.
FiOS, however, requires that Verizon digs up the subscriber's driveway and installs customer premises equipment. 5G just needs a wireless home router that could be installed by the users themselves.
Verizon is starting commercial trials in 2017. "You will see us in different markets, testing different manufacturer's equipment in different models. This will include rural, suburban, and city tests." The operator will be looking to find out things like how many homes a 5G small cell can cover and more.
Shammo thinks his key advantage is the 28GHz bandwidth that Verizon got the rights to lease through acquiring XO Communications. "That covers 40% of the US," he said.
That's all licensed for fixed wireless use for the time being, as per the Federal Communications Commission (FCC) rules. We're hoping that'll become mobile at some point down the road," Shammo said.
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