Share Name Share Symbol Market Type
Verizon Communications Inc NYSE:VZ NYSE Common Stock
  Price Change % Change Share Price High Price Low Price Open Price Shares Traded Last Trade
  -0.22 -0.37% 59.30 11,698 12:25:47

AT&T, Verizon Vow to Boost Sales Before 5G-Fueled Debt Comes Due -- Update

12/03/2021 8:43pm

Dow Jones News

Verizon Communications (NYSE:VZ)
Historical Stock Chart

From Mar 2021 to May 2021

Click Here for more Verizon Communications Charts.
By Drew FitzGerald 

Cellphone carriers that spent years promoting their blueprints for new fifth-generation wireless networks devoted the past week to explaining how they plan to pay for them.

AT&T Inc. and Verizon Communications Inc. said they would spend billions of dollars more in the coming years on cellular-tower equipment, fiber-optic lines and other infrastructure to use new wireless spectrum licenses they acquired through a federal government auction. T-Mobile US Inc. said it would put the new licenses to use without increasing its capital budget.

AT&T reassured investors Friday that it wouldn't need to slash its $15 billion annual dividend this year to pay its tab. Verizon, meanwhile, on Thursday launched a $25 billion bond sale to spread the costs over several years.

The plans, detailed in a series of online investor events this week, will add more obligations to an already debt-laden wireless sector. The Federal Communications Commission earlier this year sold $81 billion of C-band spectrum licenses, a coveted swath of radio frequencies already used in other countries to carry 5G data. Analysts expect the auction winners to spend another $14 billion to help move current C-band satellite users into nearby spectrum bands to clear the sold-off licenses for cellular service.

Verizon, which committed more than $53 billion to the C-band licenses including clearing costs, said Wednesday that its capital spending will increase by $10 billion over the next three years as it wires more cell towers to transmit the new signals.

AT&T said it plans to devote about $6 billion to $8 billion of its capital spending toward activating its C-band airwaves, mostly between 2022 and 2024. The plan adds to a nearly $28 billion bill, including clearing costs, for the spectrum purchase.

"We're not here just to preserve a base of customers," said Jeff McElfresh, the chief of AT&T's telecom division, its largest in terms of revenue and earnings. "We're No. 3 in the marketplace. We've got a great network. We're going to continue to invest in that network, and you'll see us continue to grow."

The carriers plan to pay for the spectrum splurge through increased revenue. Verizon said its core revenue base will grow by more than 2% this year and more than 3% over the following two years. The company predicted its customers will upgrade to more expensive unlimited-data wireless plans supported by the high-capacity 5G network. Executives also highlighted future opportunities from cloud-computing customers and business users.

AT&T affirmed its 2021 financial projections, which called for total revenue growth around 1% and stable adjusted earnings compared with 2020. The Dallas company also repeated its commitment to shareholder dividends, which cost about $15 billion last year, and forecast subscriber growth for its HBO business.

T-Mobile staked its business plan on adding more cellphone customers, largely at rivals' expense. The all-wireless company said it has room to grow in mostly rural areas once dominated by AT&T and Verizon.

All three companies also pledged to use their cellphone infrastructure to beam internet service to home-broadband customers, albeit to varying degrees.

T-Mobile promised to serve 7 million to 8 million home-internet customers within five years, focusing its offers on areas that lack competition for broadband-level speeds. Verizon said its fixed-wireless will cover 30 million households in the coming years but didn't detail its expectations for total subscribers.

AT&T said it would use C-band frequencies to connect households in some far-flung areas where fiber is too expensive to build. But its division leaders said the company's airwaves will mostly serve mobile devices because of the relatively large data loads that big-screen televisions and other household devices demand.

"That starts to put a real tax on the mobile network," AT&T Chief Executive John Stankey said during the company's Friday investor update, adding that for home broadband service executives "still believe it's really wise to invest in fiber in a prudent fashion."

Industry executives also revealed some potential bones of contention about each company's plan for 5G coverage. Verizon's technology chief said the C-band spectrum it amassed was so powerful that it could cover most of its service area without needing more cellular towers.

T-Mobile disputed that math and said the midrange frequency wouldn't travel far enough to reach many suburban and rural customers. T-Mobile spent less to acquire C-band licenses because it is already counting on a cache of lower-frequency spectrum acquired from Sprint to fill in the areas that C-band won't cover.

"It's just physics," T-Mobile Chief Executive Mike Sievert said in an interview. "The signal only reaches only two-thirds as far."

Representatives of Verizon, the country's largest cellphone carrier by subscribers, said their existing tower network is dense enough to meet future needs.

"We build our network to have overlapping coverage," Verizon technology chief Kyle Malady said earlier in the week. "So the C-band fits exactly right in this," he said. "We don't see a need to go down into low-band spectrum to augment an uplink."

Write to Drew FitzGerald at


(END) Dow Jones Newswires

March 12, 2021 15:28 ET (20:28 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

1 Year Verizon Communications Chart

1 Year Verizon Communications Chart

1 Month Verizon Communications Chart

1 Month Verizon Communications Chart
ADVFN Advertorial
Your Recent History
Verizon Co..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20210511 11:43:09