In a story titled “Verizon, Dish and Cable Are Winners in 5G U.S. Airwaves Sale”, written by Todd Shields & Scott Moritz, Bloomberg reported on September 2, 2020 Verizon spent $1.9 Bil to buy radio spectrum during the US FCC’s July 2020 auction. Verizon investors may want to ask if this investment is a smart move, or just throwing more money into an effort where success will hinge on something other than radio frequency.
Compared to T-Mobile, Verizon has chosen the harder 5G bandwidth to build out
Tim Fisher of Lifewire has written a useful short article on the topic of the various frequencies available to Verizon, T-Mobile, AT&T & other telecommunications providers committed to building out 5G data networks. The title of Fisher’s article is “5G Spectrum and Frequencies: Everything You Need to Know“. Fisher reports Verizon has chosen to build out a network “…using milimeter waves, specifically 28GHz and 39GHz.” AT&T, in contrast, has chosen a hybrid approach: “…[using] millimeter wave spectrum for dense areas and low-spectrum for rural and suburban locations”. T-Mobile “[u]ses low-band spectrum (600 MHz) as well as 2.5 GHz.”
A short note on radio frequency: the higher the frequency, the more susceptible the radio signal is to disruption. Dense foliage, physical structures composed of radio-unfriendly materials can disrupt the kind of very high radio frequencies Verizon has chosen to use to deliver its “5G Ultra wideband” network. These very high frequency radio transmissions also need more amplification to travel than their lower fequency siblings. The result of these limitations is electronic sprawl-lots of amplifiers, repeaters, antennae must be built out to deliver service.
Building out electronic sprawl is not a cheap procedure. Payback on construction spend depends on density of customers per mile. The higher the density, the quicker the payback. Therefore cities and densely populated suburbs are prime targets for Verizon’s service. But social groups located in cities and metro area suburbs are pushing back on the sprawl factor. Back in 2019 Christopher Mims wrote a story titled “WSJ: US Cities Saying no to 5G; Department of Homeland Security on 5G Risks“. A year later, in September 2020, few if any of the concerns Mims reported in his story have been fixed. Cities are simply not ready for the electronic sprawl Verizon’s choice of 5G network requires.
Buying more frequencies makes sense if Verizon plans on building out more of its network on private property. But is there enough of a need for ultra fast wireless data, in pandemic 2020, on private property? Some skepticism looks like a right response. The real hurdle, requiring cash to fix, is changing the attitude of social groups on the topic of electronic sprawl. Verizon investors should be looking carefully over the “5G Ultra wideband” network plans for signs money has been allocated to change the minds of these groups on the topic of the risk/reward of building out its network.
Like this story? Here is a link to another you may find helpful: