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Tag Archives: Verizon

Tier 1 Wireless Carrier CapEx: Steady As She Goes!

John Celentano

Principal
Skyline Marketing Group

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Celentano

Tier 1 wireless carriers’ 2Q16 financial results showed aggregate capital expenditures (capex) growing 11 percent sequentially from 1Q16 but at lower levels, down 14 percent, compared to spending in 2Q15.

The good news is that the Tier 1s maintained their guidance for full-year capex. AT&T was the outlier suggesting its 2016e capex is trending towards the “low end of the range” without specifying a number.

The Tier 1s, collectively, are planning network investments totaling $26.9 billion in 2016e. That figure is down 11 percent from the $30.2 billion these national carriers spent in 2015. The Tier 1 carriers account for an Slide1estimated 96 percent to the total public wireless carrier capex in the United States.

Yet capital spending remains heavily concentrated. Verizon leads the pack with $11 billion or 41 percent of the Tier 1s’ total. Followed by AT&T at 31 percent of the total.

The lion’s share of the investment, more than 60 percent, is applied to radio access network (RAN) infrastructure – macrocells, small cells and DAS. All carriers still are spending on macrocell upgrades and expansions to 4G LTE coverage and capacity in multiple frequency bands. Network densification is accelerating, however, with a shift in spending toward indoor and outdoor small cells, and in-building DAS deployments.

Slide2The Tier 1s spent $12.9 billion or 48 percent of their aggregate 2016e budget through mid-year. The $6.8 billion in 2Q16 was up 11 percent sequentially from $6.1 billion in 1Q16 but down 14 percent compared to $7.9 billion in 2Q15.

Capex among Tier 1s should ramp steadily through the balance of the year, even at reduced levels from 2015. We expect 3Q16 spending to stay flat with 2Q, then uptick by 8 percent to $7.2 billion in 4Q16 as the Tier 1s round out their full-year budgets.

The lower but steady spending is little conciliation for wireless equipment vendors and professional service providers for the current year, at least. Nonetheless, accelerated infrastructure spending through year-end, mainly to meet unrelenting mobile data demand, bodes well for continued network expansion into 2017 and beyond.


John Celentano is a principal in Skyline Marketing Group, which provides technology marketing & sales strategy advisory in advanced communications services, and wireless, telecom, data networking infrastructure markets.  Additionally, support is provided for internal positions in market analysis, business development, strategic planning, strategic marketing, product management, product marketing, sales operations.

For more information, go to https://www.linkedin.com/in/john-celentano-4822692

Verizon to Acquire Fleetmatics

August 9, 2016 — Accelerating its penetration into fleet telematics, Verizon Communications will acquire Fleetmatics, a global provider of fleet and mobile workforce management solutions, for $2.4 billion in cash. The announcement came less than a month since Verizon Telematics purchased Telogis, a fleet navigation Software-as-a-Service (SaaS) provider with distribution through Ford, General Motors, Hino, Isuzu, Mack and Volvo’s Class 8 truck unit.

“The powerful combination of products and services, software platforms, robust customer bases, domain expertise and experience, and talented and passionate teams among Fleetmatics, the recently-acquired Telogis, and Verizon Telematics will position the combined companies to become a leading provider of fleet and mobile workforce management solutions globally,” said Andrés Irlando, CEO of Verizon Telematics.

Headquartered in Dublin, Ireland, with North American headquarters in Waltham, Mass, Fleetmatics has more than 37,000 customers, 737,000 subscribers and 1,200 personnel. The company’s Web-based solutions provide fleet operators with visibility into vehicle location, fuel usage, speed and mileage, and other insights into their mobile workforce, helping them to reduce operating costs, as well as increase revenue.

“Verizon and Fleetmatics share a vision that the SaaS-based fleet management solution market is extraordinarily large, lightly penetrated, global and fragmented which can best be attacked together with a world class product offering and the largest distribution channel in the industry,” Jim Travers, chairman and CEO of Fleetmatics.

Verizon Telematics, a subsidiary of Verizon Communications, operates in more than 40 markets worldwide and offers comprehensive wireless, software and hardware solutions to consumers, enterprises, automakers and dealers to power connected-vehicle products around the world.

Verizon Doubles Down on the Internet with Yahoo! Acquisition

July 26, 2016 — Verizon has announced its plan to acquire Yahoo!, which has more than 1 billion monthly active users, including 600 million monthly active mobile users through its search, communications and digital content products. The deal is worth $4.83 billion in cash.

Yahoo also connects advertisers with target audiences through an advertising technology stack that combines data, content and technology.

“Just over a year ago we acquired AOL to enhance our strategy of providing a cross-screen connection for consumers, creators and advertisers,”said Lowell McAdam, Verizon chairman and CEO. “The acquisition of Yahoo will put Verizon in a highly competitive position as a top global mobile media company, and help accelerate our revenue stream in digital advertising.”

Yahoo and AOL are two of the pioneers that popularized the Internet with email, search and real-time media, but each had struggled to remain relevant as social media took the stage as the primary way Millennials communicate.

The addition of Yahoo to Verizon and AOL will create one of the largest portfolios of owned and partnered global brands with extensive distribution capabilities. Combined, AOL and Yahoo will have more than 25 brands in its portfolio for continued investment and growth. Yahoo’s key assets include premium content brands in major categories including finance, news and sports, as well as an email service with hundreds of millions monthly active users. Additional technology assets in the advertising space include Brightroll, a programmatic demand-side platform; Flurry, an independent mobile apps analytics service; and Gemini, a native and search advertising solution.

Verizon Telematics Expands with Telogis Buy

By J. Sharpe Smith

Senior Editor
AGL eDigest

July 6, 2016 — Verizon Telematics, whose “hum” consumer vehicle connectivity business contributed 176,000 connected device adds in Q1 of this year, has purchased Telogis, a fleet navigation Software-as-a-Service (SaaS) provider with distribution through Ford, General Motors, Hino, Isuzu, Mack and Volvo’s Class 8 truck unit.

“This unit should serve as a nice complement to VZ’s [consumer vehicle] telematics division,” wrote Jennifer Fritsche, senior analyst, Wells Fargo Securities, wrote. “We believe this acquisition represents an interesting strategic move to ramp up its scale in the telematics space.”

Verizon’s purchase of Telogis will create one of the largest telematics company in the United States and it marks the first time a wireless company has bought a telematics concern, according to Fritzsche.

“But we do not think it will be the last. The telematics industry is highly fragmented with many smaller players funded by venture capital. We expect to see additional consolidation among these players to scale their platforms and appeal to a wider base of customers,” she wrote.

Terms of the transaction have not been disclosed and it is expected to close in the second half of 2016. PJT Partners and Wells Fargo Securities, LLC acted as financial advisors and Debevoise & Plimpton acted as legal advisor to Verizon. Barclays and J.P. Morgan acted as financial advisors and Paul Hastings acted as legal advisor to Telogis.

Carrier Plans to Use 5G to Replace Fixed Wireless

By Ernest Worthman

       Worthman

Worthman

April 28, 2016 — Both Verizon and AT&T are talking 5G this month. Verizon says the have “ambitious plans” to commercialize 5G. in fact, they want to be the first company to roll out 5G. Interestingly, Verizon sees the first case for 5G to be the replacement of fixed wireless.

That is rather interesting. According to Verizon CFO Fran Shammo, 5G is not a replacement technology.

“This is not a capital intense overlay of the 4G network,” he said during the latest earnings call. “It is really all about high-speed video delivery over a wireless network in a very efficient way.” I guess they plan to do that with fixed wireless from what I am able to assess.

That is even more interesting. Granted video, and the rest of the multimedia streaming platforms will be a large part of the data tsunami that 5G is supposed to handle, but claiming that 5G is simply video is, IMHO, a bit of tunnel vision.

I am not sure why that is so important to Verizon. Sure, it is a potential market but fixed wireless isn’t something new and certainly not a major component of 5G. Most of 5G will be densification and that will require implementation of next-generation technologies like SDN and NFV, and multiple HetNet components, and a lot of small cells. Does Verizon see replacing wireline broadband with fixed wireless as a primary focus for 5G, or is this just their test bed scenario? Let’s hope it is just to test the technology waters.

I know the big four are looking at video as the next great opportunity for carriers, but I’m pretty sure that 5G is not just about high-speed video delivery.

AT&T, is on the fixed wireless bandwagon as well, but they explain it as the platform to find out how mm wave technology works, and their test bed is fixed wireless. But they don’t make any brash statements about 5G as Verizon does.


A 5G Marketing Ploy?

There is some concern in the 5G ecosystem that leap-frogging to become the first player with “5G” technology will blur the real vision of 5G. For example, South Korean operators intend to launch some form of 5G technology for the Winter Olympics in February 2018. However, first official release of a 5G standard isn’t expected until mid-2018.

That leads to speculation that just adding a few new features to 4G, in the next year or two, as part of 3GPP Release 13 and 14, will cause some “creative” marketing executives to prematurely dub such progress as 5G.


Contrary to Verizon’s seeing video as the primary driver for 5G, some see gaming as the next killer market, according to Newzoo BV. The researchers say that mobile games will generate almost $37 billion in revenue this year, even though most of them are free downloads. That works because the game developers make money through advertising and through selling in-game goods and add-ons that that enable players to do more inside the game.

In the long run, I believe that mobile gaming will far outpace video in the 5G landscape. The big question here will be latency. Video can be buffered, games are real time and they are not very forgiving if the network bogs down. Here too, small cells, SDN, and NFV will play a key role in the 5G network model.