Verizon: 5G, Mobile Edge Compute Will Pave Way For Business Segment Growth

’We have great momentum in 5G adoption … and our long-term growth is in fixed wireless access and mobile edge compute,’ Verizon CEO Hans Vestberg says of the carrier’s Q3 2021 results.

Verizon’s positive wireless performance, climbing SMB revenues and 5G investments are paving the way for business growth that’s returned to pre-pandemic levels, according to Verizon executives.

The carrier is setting its sights on becoming the nationwide broadband provider of choice for businesses and residential customers, as well as for those on the go, CEO Hans Vestberg told investors during the carrier’s fiscal third-quarter 2021 conference call Wednesday.

“We have all the assets we need to extend our number one position in the market,” Vestburg said. “We have great momentum in 5G adoption … and our long-term growth is in fixed wireless access and mobile edge compute.”

[Related: Verizon, Microsoft Azure Roll Out Private Mobile Edge Cloud For Enterprises]

Verizon gained 699,000 retail postpaid net additions during third-quarter 2021, including 429,000 phone net additions, an increase of 51.6 percent year over year as sales bounce back from the pandemic. Matt Ellis, Verizon’s executive vice president and CFO, said that the business segment contributed to 276,000 of those retail postpaid net additions, including 162,000 phone net additions.

Verizon said that more than 25 percent of its customer base is already on 5G-capable devices. The carrier in April began to integrate its recently-acquired nationwide C-band assets with its existing mmWave spectrum to expand its 5G footprint.

Total operating revenue for Verizon Business, which includes the company’s Global Enterprise Solutions, SMB, public sector and wholesale businesses, dipped slightly by .8 percent with revenues of $7.69 billion during the quarter compared with $7.75 billion in the year-ago quarter.

Verizon in the first quarter of the year said it expected small and midsize business revenue to be “subdued” in 2021 as the economy recovers. However, the carrier’s SMB revenues have climbed each quarter and are serving as a bright spot in Verizon Business revenues, Ellis said.

Global Enterprise Solutions revenue, which has felt the brunt of the financial fallout from the pandemic, continued its decline by 1.7 percent to $2.55 billion in revenue in third-quarter 2020 compared with $2.59 billion a year ago, which the carrier attributed to wireless growth offset slightly by wireline declines. SMB revenue, on the other hand, grew 7.1 percent during the quarter to $2.94 billion from $2.74 billion in the year-ago period. Public sector declined 5.6 percent to $1.55 billion during the quarter compared with $1.64 billion last year. Wholesale revenue continued to decline, falling 15.5 percent to $769 million from $775 million in third-quarter 2020.

Business wireless sales, however, climbed 3.6 percent year over year to $3.01 billion compared to $2.99 billion in Q3 2020.

Verizon said it’s seeing strong interest from enterprises in the private wireless and mobile edge compute. The Basking Ridge, N.J-based carrier in 2020 partnered with Amazon Web Services (AWS) to combine its 5G Edge mobile compute platform with AWS’ compute and storage capabilities. Vestberg called Verizon “a leader” in mobile edge computing thanks to its partnerships in this space.

Verizon said that its 5G Business Internet service is now available in parts of 57 U.S. cities as the carrier continues to bet on 5G as a way to boost its business segment, which has struggled in recent quarters due to the COVID-19 pandemic.

Verizon’s 5G Home service is now in 60 cities, the carrier said.

Vestberg pointed to continued business transformation internal to the company as one of his priorities for the rest of the year. Verizon on Sept. 1 closed on the sale of its struggling Verizon Media business unit, which includes its AOL and Yahoo assets, for $5 billion to private equity firm Apollo Global Management. The sale is helping to free up the carrier to focus on core telecom services and future wireless investments, he said.

For the third quarter of the year, which ended Sept. 30, Verizon reported operating revenue of $32.92 billion, up 4.3 percent from $31.54 billion a year ago. The carrier’s net income grew 45.5 percent in the quarter to $6.55 billion, up from $4.50 billion during the same period last year. Verizon reported diluted earnings per share of $1.55, up 47.6 percent compared with diluted earnings per share of $1.05 during third-quarter 2020.