In comments today at an investor relations event, Verizon’s CTO said that the operator’s forthcoming fixed wireless service, which the company is launching later this year in three to five cities, is just “one slice” of its broader plans for 5G technology and its network overall. And Hans Vestberg also said that, because of the design of Verizon’s network, the economics of the operator’s fixed 5G service “can be different.”
“We have a very unique set of assets,” Verizon’s Vestberg said, explaining that the operator is working to move from operating seven different vertical networks to operating one horizontal network. That one horizontal network will leverage common elements like a converged core and unified fiber transport, and then will be able to switch to a particular customer at the edge of the network, whether that customer is on the operator’s Fios fiber service or its wireless LTE network. Vestberg described it as an “intelligent edge network.”
Moreover, Vestberg explained that 5G network technology will allow Verizon to offer different types of services, whether it’s low latency connections for video game players or high-speed connections for those who are uploading large amounts of video. “That is a huge difference in 5G,” Vestberg explained. “We’re sharing the totality of the network. We do one slice here. And of course we’re thinking there will be many other slices on 5G over time.”
Continued Vestberg: “One slice is doing residential broadband. We use all the other assets that are common. And that I think is a little bit of a misunderstanding,” he said. “The core network, the transport network, the fiber network, all is the same. It’s one slice out of that software and the antenna that is doing the broadband, and the rest is the same investment, which means the economics can be different.”
Verizon late last year announced plans for its first 5G residential broadband service launch, beginning in Sacramento, California, in the second half of 2018. The carrier plans to launch wireless 5G residential broadband services in three to five U.S. markets in 2018.
Verizon said its initial 5G residential broadband fixed wireless services could reach approximately 30 million households nationwide.
In his comments today, Vestberg said the network evolution he is spearheading at Verizon is now underway and will take years to complete. But he said that it will be a major part of how Verizon expects to reach its target of saving $10 billion over the course of the next four years. “I feel responsible for a big part of that $10 billion because I’m doing that flip on the network, going from horizontal to vertical,” he said. “It’s going to take years. … We have already started.”
Verizon CEO Lowell McAdam said last year that Verizon set a goal to take out $10 billion in expenses by 2020 to stay competitive and reduce operational costs. Also last year, Verizon’s John Stratton said that network virtualization would help Verizon and Vestberg reach that goal. He said that the value of network virtualization is a “very robust” opportunity.