The US DoD to collaborate with industry on 5G
Military investment in innovation is a huge driver of technological progress. The internet’s predecessor, Arpanet, . The rockets that NASA used to reach the Moon in 1969 were heavily based on the work of , a Nazi weapons maker.
The shadow cast by military investment on the technological foundation of modern society is massive.
Now, the US military may be about to play a much larger role in the ongoing development and rollout of 5G communications.
Earlier this week, the US Under Secretary of Defense for Acquisition and Sustainment, Ellen M Lord, spoke remotely from the Pentagon about the future of the DoD’s relationship to 5G networks. , 5G will transform the way the US military operates, supporting command and control, intelligence, movement and maneuver, protection, sustainment and information.
"Tomorrow's warfighters will use local and expeditionary 5G networks to move massive amounts of data to connect distant sensors and weapons into a dense, resilient battlefield network. This massive amount of data is a key to unlocking further technological gains in the form of artificial intelligence and machine learning, as well as unmanned and autonomous weapons systems across all domains," she said in her statement.
The DoD’s plan was at least in early October, when the Pentagon announced it would invest $600mn in 5G experimentation and testing at five test sites, a project which reportedly represents the largest full-scale 5G tests for dual-use applications in the world.
The test sites are spread across the contiguous US and will be overseen by all branches of the US military. Locations include Hill Air Force Base, Utah; Joint Base Lewis-McChord, Washington; Marine Corps Logistics Base Albany, Georgia; Naval Base San Diego, California; and Nellis Air Force Base, Las Vegas, Nevada.
Some of the projects that will soon be underway involve using 5G to support augmented and virtual reality applications for mission planning and training, testing 5G-enabled Smart Warehouses, and evaluating 5G technologies to enhance distributed command and control.
In addition to supporting military and industrial applications for new 5G technology, Lord also stated that the Pentagon would be working to bring 5G network component manufacturing back to the domestic US - or, more specifically, out of Asia. She claimed that the majority of microchip and telecom manufacturing was occurring in the APAC region, a fact which she believes to represent a national security risk. She concluded by saying that “the US must lead in 5G deployment.”
Across the Pacific, a similar pattern is unfolding as US and Chinese communications companies work to disentangle themselves as the trade war wears on. PRC-backed tech firm Huawei recently announced plans to build , in order to reduce dependency on US chipmakers like Qualcomm.
Verizon’s 5G adoption rises as Q2 success hits record high
Verizon has reported record success in the second quarter of 2021 caused by an increase in the adoption of its 5G phone service, customer and sequential wireless service revenue growth, and network reliability. The company revised its revenue and adjusted EPS guidance upward for the full year as a result.
Hans Vestberg, Chairman and CEO of Verizon, said: “We are executing on our multipurpose network strategy and producing positive results in each of our five growth vectors, recording strong second-quarter results. With more connections on our network than anyone else, our already excellent network performance improved in the quarter and was recognized by RootMetrics as the best overall network performance for the 16th time in a row. We are also expanding our 5G Ultra-Wideband and 5G Home markets”.
He added that that the company “is excited about its momentum leading into the second half of the year”, and that it is “on track” to close the Tracfone and Verizon Media transactions.
Verizon’s Q2 2021 highlights
- US$1.40 in earnings per share (EPS); adjusted EPS*, excluding special items, of US$1.37.
- Operating revenue of US$33.8bn, a result of strong sequential wireless revenue growth.
- Net income of US$5.9bn and adjusted EBITDA* of US$12.2bn.
- Total wireless service revenue of US$16.9bn, a 5.9% increase year over year, and a 4.0 percent increase from second-quarter 2019.
- Total retail postpaid churn of 0.94 percent, and retail postpaid phone churn of 0.72 percent.
- 528,000 retail postpaid net additions, including 275,000 phone net additions, resulting in 121.3mn total retail connections.
- Total revenue of US$23.5 bn, an increase of 11.2% year over year, and an increase of 6.7% from second-quarter 2019.
- Total retail postpaid churn of 0.83%, and retail postpaid phone churn of 0.65 percent, a record-low retail postpaid phone churn outside of second-quarter 2020 and third-quarter 2020, which were heavily impacted by the COVID-19 pandemic.
- 350,000 retail postpaid net additions, including 197,000 phone net additions, driving 5G-phone adoption to approximately 20% of Consumer wireless phone customers and step-ups to premium unlimited plans.
- 92,000 Consumer Fios Internet net additions. The company's trailing 12-month total Fios Internet net addition performance is the highest since 2015.
- Total revenue of US$7.8bn, an increase of 3.7% year over year, and relatively flat from second-quarter 2019.
- Total retail postpaid churn of 1.30%, and retail postpaid phone churn of 1.07%.
- 178,000 retail postpaid net additions, including 78,000 phone net additions.
“Second quarter results were exceptional, both financially and operationally,” said Verizon Chief Financial Officer Matt Ellis. “Our strong first-half performance and the momentum in our business gives us the confidence to raise our total wireless service revenue growth guidance to between 3.5% and 4%, an update from prior guidance for 2021 total wireless service revenue growth of at least 3%. We are also raising our adjusted EPS guidance* to the range of US$5.25 to US$5.35, an update from prior guidance for 2021 adjusted EPS* of US$5.00 to US$5.15”.
Also in Q2, Verizon came to an agreement with Apollo funds to sell Verizon Media, the expected close date being in the second half of 2021. Following this, the Verizon Media business classified certain assets as “Held for Sale”, which the company no longer depreciated or paid off. According to Verizon, this led to a partial quarter benefit of three cents per share in Q2, which will continue as a benefit until the deal is closed.