Analysts: Verizon Will Need Help With Small Cells

Verizon has one of the most ambitious plans of any carrier in the United States for a small cell buildout to densify its network and get it ready for the march of 5G, but some analysts, including MoffettNathanson, think that Big Red will need a bit of help with the finances, labor, and materials involved in the massive buildout that it is allegedly planning. The planned buildout is to be done using Verizon's own people and resources from the ground up, and will eventually cover its entire network. Even given Verizon's impressive standing in the world of fiber optic and landline deployment, this means that the buildout will take a lot of time and man hours. This, in addition to the vast scale and materials, adds up to a very expensive buildout plan. All of these factors, in analysts' opinions, add up to a high likelihood that Verizon will end up falling short of its deployment goals in one sense or another, if Verizon does not turn to outside help.

According to comments reportedly made by MoffettNathanson, it could cost Verizon up to $30 billion just to build out to the 15-percent of the US market that's the most populous. Verizon wants to draw on its landline roots and build out the fiber network for the small cells themselves, which may cut costs and give them more control, but will result in the buildout taking much longer to expand than it otherwise would. While Verizon's capex budget is mammoth, MoffettNathanson's people seem confident that it just won't be able to cover everything Verizon wants to do with its network, especially given the scale and time-frame.

Verizon's approach stands in stark contrast to rival T-Mobile, who is planning to put its small cell count up to 25,000, but use the low-band spectrum that it obtained from the recent FCC auction for most of its buildout. Sprint, meanwhile, is essentially making a gamble on small cells, but has yet to say exactly how it plans to complete the deployment. While AT&T has said comparatively little about its 5G buildout plans, only that it will stay competitive with others and have its densification efforts for 5G very well underway by the time the standard becomes fully official in 2020.

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