Verizon Business got off to a strong start in 2022 with record demand for fixed wireless broadband and next-generation wireless services such as 5G, according to CEO Hans Vestberg.
Verizon has been focused on its Network-as-a-Service strategy and Vestburg called this year the critical time to scale its 5G footprint to capture the promise of lightning-fast network speeds. The Basking Ridge, N.J.-based carrier said that 75 percent of its revenue growth will be generated by 5G mobility and nationwide broadband over the next four years, especially as interest around public and private 5G and mobile edge compute reaches a fever pitch.
Private 5G and mobile edge compute offerings will provide a new way for Verizon to build new relationships with its business customers, Vestburg said. “This year, we’re building it. Meaningful revenue will be more next year. … We see so many use cases. This is going to pay off big time in the next five to 10 years,” Vestberg said during Verizon’s first-quarter 2022 earnings call Friday.
Verizon Business reported 395,000 wireless retail postpaid net additions in first-quarter 2022, including 256,000 phone net additions. The results marked the carrier’s best quarterly phone net addition performance since 2018, when the carrier kicked off its Verizon 2.0 restructuring strategy, the carrier said.
Business wireless service sales climbed 2.1 percent for the first quarter to $3.13 billion compared with $3.06 billion in first-quarter 2021. Matt Ellis, Verizon’s executive vice president and CFO, said that business wireless growth was driven by primarily by SMBs, which continue to bounce back from the pandemic. The segment also benefited from the enterprise and public sector segments, each of which delivered double-digit phone gross addition growth.
The carrier said it expects business wireless service growth to continue to expand over the rest of 2022.
Verizon alsonsaid it continues to see strong interest from enterprises for private wireless and mobile edge compute. The carrier in 2020 partnered with Amazon Web Services to combine its 5G Edge mobile compute platform with AWS’ compute and storage capabilities. Verizon also has partnerships with Google Cloud and Microsoft Azure for public and private mobile edge computing.
Total operating revenue for Verizon Business, which includes the company’s Global Enterprise Solutions, SMB, public sector and wholesale businesses, dipped slightly by 0.9 percent with revenue of $7.71 billion during first-quarter 2022 compared with $7.78 billion in the year-ago quarter.
Global Enterprise Solutions revenue, which has felt the brunt of the financial fallout from the pandemic, continued its decline by 3.8 percent to $2.46 billion in revenue in first-quarter 2020 compared with $2.56 billion a year ago, which the carrier attributed to demand in wireless products offset by wireline revenue, saidEllis.
SMB revenue, on the other hand, grew 7.5 percent during the quarter to $3.04 billion from $2.83 billion in the year-ago period. Public sector saw a decline of 5.7 percent to $1.52 billion during the quarter compared with $1.65 billion last year. Wholesale revenue also continued to decline, falling 12.2 percent to $655 million from $746 million during the first quarter of 2022.
For the first quarter of the year, which ended March 31, 2022, Verizon reported operating revenue of $33.55 billion, up 2.1 percent from $32.87 billion a year ago. The carrier’s net income dipped 12.4 percent in the quarter at $4.71 billion compared with $5.34 billion during the same period last year. Verizon reported diluted earnings per share of $1.09 in first-quarter 2022 compared with $1.27 in first-quarter 2021.
Verizon also said it has rolled out free calling to and from Ukraine, which has been in place since start of the war, Vestberg said.