Verizon’s focus on expanding its 5G network paid off in a big way for the company, with record earnings in the second quarter of 2021 driven by increased adoption of the high-speed offering and plans to continue expanding both the 5G Ultra Wideband and 5G Home networks.
In its quarterly earnings call on Wednesday (July 21), Verizon reported an overall 2021 Q2 operating revenue of $33.8 billion, net income of $5.9 billion and adjusted EBITDA of $12.2 billion. The consumer side of the business was even more successful, with $23.5 billion in revenue, up 11. 2 percent from Q2 2020, and an increase of 6.7 percent from the same time two years ago.
Verizon’s Media revenues were up about $2.1 billion, an almost 50 percent leap from last year at this time and 13 percent higher than the second quarter of 2019. Verizon Business was up 3.7 percent from the second quarter of 2020 to $7.8 billion. That’s about the same as the 2019 revenue level in that segment.
Verizon’s 5G Ultra Wideband, its super-fast, low-latency service, is now available in more than 70 U.S. cities and towns; its 5G Home Internet service is offered in 33 locations across the country.
The increase has helped enable 5G phone adoption to reach about 20 percent of Verizon’s overall consumer wireless phone customer base. That success was based on full operation of Verizon’s retail stores and consumer behaviors returning to pre-pandemic levels, as well as company promotions.
“We are executing on our multipurpose network strategy and producing positive results in each of our five growth vectors,” said Verizon Chairman and CEO Hans Vestberg. “We are excited about our momentum leading into the second half of the year.”
Verizon’s strong first-half performance led the company to predict 3.5 to 4 percent revenue growth for its wireless service this year, up from 3 percent, said Verizon Chief Financial Officer Matt Ellis. The company also expects earnings per share to reach $5.25 to $5.35, up from earlier projections of $5 to $5.15.
Verizon certainly isn’t finished when it comes to finding new ways to use 5G to meet customers’ needs. The company is pairing with Mastercard on initiatives ranging from contactless shopping and autonomous checkout technology to cloud-based point-of-sale (POS) systems. Those efforts are focused on the financial technology, payments and banking sectors, and on bringing increased automation and commerce-related products to small and medium-sized businesses.
Last month, Verizon announced a new 5G-powered open hybrid cloud platform and debuted a pair of robots that use 5G to communicate. The cloud platform was created in partnership with IBM and Red Hat, with automated operations and service orchestration serving as its 5G core, according to an announcement from IBM. The robots, which were shown off at the Mobile World conference in Barcelona, communicate using 5G connectivity and mobile edge computing.
“5G will make it possible for robots to connect with other robots and devices of all kinds in a way that simply wasn’t possible before,” said Verizon Chief Strategy Officer Rima Qureshi at the event.
Continued Focus on 5G
Verizon Chief Revenue Officer Sampath Sowmyanarayan told PYMNTS this spring that he looks at the company as “the connected in the connected economy.”
“One of the interesting things about 5G is that businesses know more than consumers,” he said. “Typically, what happens, especially in mobile technologies, is that consumers get the technology first, and business drags along. This time, it’s fundamentally different. 5G is built for business, and the consumer is going to get pulled along. So, typically, I would say around 20 to 30 percent of consumers know very well what 5G can do, but more than half of businesses have a very good sense of what 5G could do for them.”
5G’s low latency, enhanced security features, lower power usage and ability to handle large, media-rich data sets have made it highly attractive to the business community, said Sowmyanarayan.
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