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Verizon to Deploy Small Cells Using 3.5GHz As Per FCC Norms

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U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) has long been involved in small cell densification and the expansion of its dark fiber footprint strategy in relation to 5G technology trials and launch. To this end, as per a recent FierceWireless report, Verizon is planning to deploy small cells – both low power and high power – using the 3.5 GHz or Citizens Broadband Radio Services (CBRS) band.

The CBRS Allianceis an association working toward defining standards that would allow wireless carriers, enterprises, venue owners and others to deploy LTE networks in the 3.5 GHz band. Companies in the CBRS Alliance, namely Google-affiliated Access Technologies, Federated Wireless, Intel, Qualcomm inc. (QCOM - Free Report) , Nokia Corporation (NOK - Free Report) , Ericsson – have been working hard to make the 3.5 GHz band eligible as per the rules of U.S. telecom regulator Federal Communications Commission (FCC). Recently, the nation’s four major wireless carriers – Verizon, Sprint Corp. (S - Free Report) , T-Mobile US (TMUS - Free Report) and AT&T Inc. (T - Free Report) – joined the association.

Verizon’s Plans

Verizon is actively working with multiple vendor partners and testing 3.5 GHz equipment this year in both lab and field tests. The company’s officials mentioned that they have already conducted infrastructure testing. Subject to the availability of the spectrum access server (SAS), commercial-grade network equipment and capable devices, further testing is expected to be completed by early 2018.

Verizon has plans to deploy two types of base stations using low-power and high-power small cells. Low-power small cells are meant for indoor applications such as enterprises, hotels, airports, convention centers and stadiums, while high-power small cells are suitable for outdoor applications such as large campuses, metro areas, downtown areas and suburban areas.

Meanwhile, Verizon’s competitor AT&T was awaiting FCC’s permission to conduct tests in the 3.5 GHz band in Plano, TX, using multiple new radio systems with integrated adaptive antennas.

Bottom Line

The 3.5 GHz range is being considered in many regions of the world for 5G, thus increasing its chances for providing spectrum globally.

Moreover, we believe the increase in the adoption of small cells is because of the inconvenience of installing large towers in inaccessible areas. Verizon stated that the small cells will be used to augment its existing 4G LTE and upcoming 5G network and will primarily concentrate on high traffic locations like a business district or shopping mall. Verizon expects small cells to increase its voice capacity and data speeds as well as complement its current LTE infrastructure. However, providing emergency power backup remains a major headwind for small cells.

The price performance of the stock is depressing. Over the past three months, the stock lost 4.52% compared with the Zacks categorized Wireless National industry’s decline of 0.67%.

Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We also look forward to see how Verizon’s new prepaid and free mobile data offering influences the stock’s price performance, growth, financials, and especially subscriber count in the ongoing first quarter of 2017 as well as in the future.

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