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Verizon (VZ) to Power 5G Installations at 7 U.S. Air Force Bases

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Verizon Communications Inc. (VZ - Free Report) recently secured a prime contract from the U.S. Department of Defense (“DoD”) for an undisclosed amount to provide 5G mobility service to seven Air Force Reserve Command installations. The deal underscores the trust and reliability enjoyed by the carrier as it continues to support the digital transformation initiatives of the federal government.

Verizon Public sector, the unit dedicated to serving various public sector entities, has been entrusted to deliver 5G Ultra Wideband service in California, Florida, Massachusetts, New York, Ohio, Pennsylvania, and Texas Air Force bases. This includes the deployment of c-band radios at outdoor locations at the facilities to improve signal bandwidth at higher speed and lower latency. The 5G Ultra Wideband technology eliminates the deployment of large towers — typically 100 feet tall 8-foot antennas —  that were traditionally used in military bases and instead utilizes small cells for network connectivity.  

Titled Offer to Lease (OTL), the contract reinforces the long-standing business relationship with the federal government as Verizon had earlier secured a similar OTL deal in 2019 to provide 5G Ultra Wideband technology to 10 U.S. Air Force bases. The company is currently continuing with the deployment of high-speed 5G wireless services at Tyndall Air Force Base in Florida. The upgraded technology will enable the defense establishment to support flight line test equipment, animated simulation and training exercises, high-definition video for telemedicine for its airmen, and ultra-fast AI techniques for biometric identification.  

The fact that the DoD is engaging with industry participants to gauge the nascent stages of emerging technology and is aiming to leverage its untapped potential to better navigate the perceived threats despite bureaucratic controls and red tapes speak volumes about the strategic importance of 5G and Verizon’s market-leading position in it. The company is continuing with the aggressive rollout of 5G Ultra Wideband service to expand its coverage across the country. It is also offering the best of LTE and 5G Ultrawideband facilities with the launch of On Site 5G — a transformative on-premises, private 5G network — for business enterprises. This customized solution enables firms that were hitherto crippled with coverage gaps, lost connectivity, fractured security, data congestion, and inconsistent service quality to have a dedicated capacity with adequate bandwidth to minimize costly downtime and missed opportunities.

Verizon’s 5G mobility service offers an unparalleled experience that impacts industries as diverse as public safety, health care, retail, and sports. The company’s 5G network hinges on three fundamental drivers to deliver the full potential of next-generation wireless technology. These are massive spectrum holdings, particularly in the millimeter-wave bands for faster data transfer, end-to-end deep fiber resources, and the ability to deploy a large number of small cells. In order to expand coverage and improve connectivity, Verizon has acquired 161MHz of mid-band spectrum in the C-Band auction for a total consideration of $45.5 billion. These airwaves offer significant bandwidth with better propagation characteristics for optimum coverage in both rural and urban areas. Verizon reportedly secured 3,511 of the 5,684 licenses up for grabs.

The stock has lost 8.3% in the past year compared with the industry’s decline of 2.8%.
 

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Nevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the broader industry are Qualcomm Incorporated (QCOM - Free Report) , InterDigital, Inc. (IDCC - Free Report) , and Juniper Networks, Inc. (JNPR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Qualcomm has a long-term earnings growth expectation of 21%. It delivered an earnings surprise of 13.5%, on average, in the trailing four quarters.

InterDigital has a long-term earnings growth expectation of 15%. It delivered an earnings surprise of 536%, on average, in the trailing four quarters.

Juniper has a long-term earnings growth expectation of 8.4%. It delivered an earnings surprise of 7.5%, on average, in the trailing four quarters.