If Verizon Communications is a bit out over its skis when it comes to 5G mobile edge compute, the company’s CEO is hard-pressed to acknowledge it.
During an equity conference held earlier in May, Verizon chairman and chief executive Hans Vestberg was asked rather pointedly if mobile edge compute – 5G or no – “at this point is more of a solution looking for a problem.”
The implication being, the telco might be investing too much too soon.
The questioner was Philip Cusik, a JPMorgan Chase & Co. senior analyst for media and communications. Cusik said executives at some data center companies he has run across are unconvinced the time is now.
“Are customers really pulling this forward?” he asked.
“We see a good demand and interaction around it,” Vestberg said, according to conference transcripts. “We are encouraged (by) what we see so far.” Revenue and profit is another matter.
Still, this year the company will offer 5G service using millimeter-wave technology in 60 cities, he said. It sells the service in 34 cities now. Millimeter-wave transmission brings faster speeds than its competitors can offer right now. But coverage is thready compared to its rivals’ because millimeter wave’s propagation rates are poorer.
Vestberg said Verizon is on schedule or “even ahead of plan when it comes to radio base stations.” This year, the firm will have five times more base stations on 5G, he said. Fiber build-out is on schedule as well – 1,500 to 2,000 route miles a month.
Yet, as Cusik alluded to, businesses are not stampeding to Verizon’s avowed No. 1 priority, the 5G network it is building.
“When it comes to offering it to customers with small and medium (businesses) as well as enterprises, you probably have a bit left before we can monetize that,” he said.
Vestberg said he expects the private variety of its edge infrastructure to generate revenue in 2022. Verizon already has a starting point there.
Engineers have created a private 5G mobile compute and storage network for Walmart. The infrastructure will only be used internally at the global retailer to streamline logistics, said Vestberg.
They also have created a public mobile edge compute service with Amazon Web Services, a project that began in December 2019.
“The public can actually go straight in to do development,” he said, enjoying low latency and “enormous throughputs.” The service is going to be cloned in 10 sites nationwide this year.
Verizon’s reaffirmation of 5G and mobile edge compute service rollout should provide some reassurance to investors as well as other technology firms looking to sell into the mobile edge computing market segment. COVID-19 is impacting enterprise technology spending, and uptake of retail 5G services is set to be slowed down.
So far, Verizon’s other big competitor isn’t slowing down either, reporting that 5G deployments would continue as planned, though in some cases construction was being delayed by pandemic-related factors.
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