(Part two of two)
UPDATE Recently, T-Mobile seems to be laser-focused on overtaking Verizon in the market for consumer wireless subscribers. The company has launched a new app that owners of eSIM-enabled phones can download to move onto the T-Mobile network automatically. T-Mobile is offering users a free trial of its network while they decide whether or not to switch.
In addition, T-Mobile is aggressively targeting the roughly 20 percent of the U.S. population that is over age 55. The operator’s Banned Seniors campaign promotes T-Mobile as the only carrier offering senior discounts nationwide (AT&T and Verizon offer these discounts in Florida.)
Even T-Mobile’s recent announcement with SpaceX could be seen as a negative for Verizon, which has partnered with Amazon’s Project Kuiper for satellite connectivity. SpaceX is far ahead of Amazon in satellite launches, although it has not yet launched its Starlink V2 satellites which will support cell phone connectivity using T-Mobile’s PCS spectrum.
On September 1, Verizon’s marketing team came out with guns blazing and aiming directly at T-Mobile. The carrier’s new #TMoan ad campaign claims T-Mobile customers are not getting the coverage they’re promised, and promotes Verizon as the nation’s most reliable network.
Getting down to business
Verizon is clearly ready to fight tooth and nail for consumer wireless subscribers, but the company is also putting major effort into other parts of its business.
Consider Verizon’s business segment. Performance year-to-date has been lackluster, with revenue off 1.3 percent during the first half, and EBITDA margin down 150 basis points. But business wireless connections are exploding, with 430,000 net adds, including 227,000 postpaid phone net adds, in the second quarter. CFO Matt Ellis said the business group’s gross phone adds were up nearly 30 percent from the same period a year ago, adding he expects the strong performance to continue.
Wireless connections are just one element of the operator’s business strategy. Verizon Business CEO Sowmyanarayan Sampath recently told the Oppenheimer Technology, Internet and Communications Conference the Verizon Business Group has a $90 billion total addressable market to “grow into” by playing in the markets for mobility, broadband and cloud. Sampath referenced “massive growth” in business wireless, and said Verizon currently has 45 percent of the market. “Every quarter we’re putting points on the board to grow that piece,” he added.
The executive also claimed most U.S. businesses will eventually get access to Verizon’s fixed wireless access service, which he said offers 150 percent higher ARPU than a typical smartphone account. That’s partly because Verizon can bundle extra services such as unified communication-as-a-service, security and SD-WAN with its fixed wireless offer.
Fixed wireless access is, of course, a business in which Verizon must compete head-on with T-Mobile, which has used its excess spectrum to offer FWA to home internet customers. So far, however, Verizon has been more vocal than T-Mobile about FWA for enterprise customers.
At the end of Q2 2022, Verizon Business Group reported 316,000 FWA accounts and the carrier’s consumer group reported 384,000 FWA accounts. T-Mobile reported a total of 948,000 FWA subscribers at the end of Q2, but did not say how many of those were enterprise accounts.
Cloud connections
During the Oppenheimer presentation, Sampath said Verizon might be the only mobile operator in the world that has formed alliances with all three hyperscalers: AWS, Microsoft Azure and Google Cloud. These cloud connections are meant to give the carrier an edge in the market for mobile edge compute (MEC) services.
Verizon has two models for selling MEC bundled with 5G. The first is private MEC, which means the customer gets hardware that combines cloud computing resources with Verizon’s 5G network in a single platform. The second is public MEC, which means the customer will access those resources in a data center or central office.
Sampath said Verizon has traditionally been a fairly horizontal company, and needs to change that stance to reach its potential in the enterprise market.
“We’re going to have to develop even more vertical expertise,” he said. “This is where we are working very closely with partners. Large system integrators are a big kind of source of partnership for us. And we are much more partner-friendly and channel-friendly than we’ve ever been before.”
By Martha DeGrasse, Inside Towers Contributing Analyst
Veteran telecom industry editor and journalist Martha DeGrasse is an Inside Towers Contributing Analyst with features appearing monthly. DeGrasse owns Network Builder Reports and contributes regularly to several publications. She was formerly a writer and editor with RCR Wireless and a TV business news producer.
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