On the multi-front war that is now a function of being a wireless carrier, 2016 was a watershed year for Verizon. From 4G densification to fiber, internet of things (IoT), 5G and Content, executives emphasized that the carrier made many strides forward during its fourth quarter earnings call.
Verizon’s total capex for the fourth quarter was $5.7B and $17.1B for all of 2016, consistent with company estimates, according to Matt Ellis, Verizon chief financial officer. Wireless capex totaled $3.5B in the fourth quarter 2016 and $11.2 billion for the full year, as LTE usage rose 49 percent.
“We invested in adding capacity through densification of the 4G network, acquired telematics and smart city businesses and extended ecosystems to monetize data traffic,” Ellis said.
Organically, internet of things revenue was $243 million, up 21 percent in the fourth quarter. Including acquisitions, IoT revenue increased more than 60 percent in the fourth quarter.
IoT profits helped offset lost earnings from the divested wireline market, Ellis said.
Verizon began its fiber optic network deployments in Boston during the quarter. Its pending XO Communications acquisition will also add to its fiber footprint with additional metro rings in 45 out of the top 50 markets.
“Fiber is an important element of our wireless networks as it allows us to strengthen our 4G LTE capacity, which also preparing for 5G, Ellis said.
5G is a focus for Verizon, Ellis said, and the carrier is launching about 10 pre-commercial pilots across the country with multiple use cases including dense urban and suburban neighborhoods.
“Our goal is to test the 5G fixed wireless technology in different environments in order to successfully operationalize 5G for a commercial launch,” he said.
Verizon is expanding its platforms and building new business models to monetize digital mobile video traffic on its network. AOL’s content and ADTECH capabilities, as well as the go90 “social entertainment” pay service and other content, also have added to Verizon’s video offerings. go90 users average 30 minutes per viewer a day, with less than 20 percent of traffic surfed on the wireless network in the second half of the year.
In 2016, through a joint venture with Hearst, Verizon launched unique content through Complex Media and a 25 percent stake in AwesomenessTV, and we are looking forward to expanding these offerings this year.
“With a focus on delivering timely, short form versions of video clips we have seen digital video consumption gain traction in the last year,” Ellis said. “We have seen increased usage in the go90 application through this exchange and we are expanding our unique content offerings.”
While the IoT may still seem ethereal to some, Verizon continued to take concrete steps to expand into this area. In September, it purchased Sensity, which enables light owners to embed networking technology within retrofit and new LED luminaires.
In November, Verizon purchase LQD WiFi, whose Palo technology hubs allow “citizen engagement experiences” as well as security, transportation, and wayfinding service. Not to mention Wi-Fi capabilities.
“We now have a deep inventory solutions on our IoT platform to provide to our customers,” Ellis said. Overall, we are confident in our ability to execute deliver results and return value to our shareholders while continuously transforming the business.”
In July, Verizon Telematics purchased Telogis, a fleet navigation Software-as-a-Service (SaaS) provider with distribution through Ford, General Motors, Hino, Isuzu, Mack and Volvo’s Class 8 truck unit.
A Transcript from Seeking Alpha was used in this article.