Super-fast 5G wireless technology has been slowly rolling across the country. In the past two years, Verizon introduced a version of 5G that is 10 to 100 times faster than the average 4G connection. Coverage reached parts of 61 cities by the end of 2020. The company also introduced a slower version of 5G across the country that drew complaints of poor performance.
On Thursday, Verizon announced it is adding fast 5G in parts of three more cities: Colorado Springs, Colo.; Columbia, S.C.; and Knoxville, Tenn. The carrier said its home Internet service based in the 5G network that reached parts of 12 cities is adding six more cities: Miami, Phoenix, San Francisco, St. Louis, Arlington, Texas, and Anaheim, Calif.
Verizon is battling AT&T and T-Mobile, its 5G rivals, to win over consumers with the lure of much faster download speeds. Businesses, meanwhile, want to use 5G in manufacturing, healthcare, and other fields to reduce lag times between data collection and computing, a feature that could prove useful for autonomous devices like drones in self driving cars.
Fortune spoke with Ronan Dunne, chief executive of Verizon’s consumer group that includes wireless and the Fios home Internet service, about the carrier’s 5G plans for 2021 and why consumers should expect a better nationwide experience.
(This interview has been edited and condensed)
Fortune: 2020 was quite a year. You reached your targets for expanding 5G but were you slowed by the pandemic?
Dunne: From a buildout point of view, we’ve been on schedule all year. If the pandemic were to go on for the second part of 2021, which I think nobody believes will be the case, you might have some impact because of administrative slowdowns and other things. But, generally, we were able to operate as planned in 2020 and, obviously, the fast start in 2021 is a function of what we’ve already built.
Where we’ve seen more operational impact has been in our retail stores. We opened them all back up by September. Then during November and December, between 150 and 250 stores were closed on an average day. We were running at about 85% of our corporate capacity.
So you’re announcing a few new markets for January but do you have goals for the full year? Last year you aimed to add 30 new 5G mobile markets and you hit 31.
We’re a little bit premature on that. We tend to provide guidance for the next year at the end of our reporting full year results. [Editor’s note: Verizon’s next reports yearly earnings on Jan. 26.] So I won’t be making any specific announcements about the details of the plan for the balance of the year at this stage.
I’m not sure yet whether we will go out with quite as much detail on the number of cities, etc., as we did. But we will give broad guidance when we do our results at the end of the month.
You also last year rolled out a much slower version of 5G across most of the country. It’s gotten some mixed reviews. PC Magazine even urged consumers to turn off 5G on new iPhones. Are you expecting improvements there?
We see continuous improvements. There are three drivers. The first is tweaking and optimization on the devices and on the network side. Then, in a new technology like 5G, you have regular upgrades in software which effect the network equipment, improving signal strength and performance. And then we have existing spectrum that isn’t fully allocated to 4G and 5G, so we can create more capacity and performance.
We’ve been very pleased. Look—you pays your money, you takes your choice. Some of the people who write it up have other agendas. We’ve always been very transparent and said the nationwide 5G layer would be built on our best-in-class 4G LTE network. What we’re generally seeing is between 5% to 20% performance improvement over 4G.
You’re also expanding your 5G home Internet service. It hasn’t gotten as much attention as the 5G phones. You added a more powerful router for the service last year. How strong is customer interest?
When we built the Fios market for the first time [around 2005-2006], we saw churn in the market grow—that is, other people’s churn—as the arrival of a new product increased people’s propensity to switch. That’s exactly the same as what we’re seeing when we open up a 5G home market. We’re seeing it triggering a higher consideration to switch. And we’re converting at the sorts of levels that we’ve experienced in Fios in the past.
What that says to us is that although the volumes and numbers are not huge in the early year or two, it says that the characteristics around people’s interest in the new product and their willingness to switch are consistent. Which is exactly what we hoped for.
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