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Verizon's profits surge as 5G shift tiptoes forward

Verizon is still adding wireless subscribers, but traditional phone customers are declining.

The Verizon logo shines brightly above CEO Hans Vestberg.

The Verizon logo shines brightly above CEO Hans Vestberg.

Angela Lang/CNET

Verizon is betting its future on 5G, while its current network is producing a mixed bag of results -- just look at its latest quarterly earnings. 

On the positive side, the company posted stronger-than-expected first-quarter profits on Tuesday when it reported earnings for the first three months of the year. It also reported a net gain of 174,000 smartphone subscribers even as it lost 44,000 phone subscribers, signaling how difficult it is to find substantial growth in a competitive and saturated wireless market. Altogether, factoring other devices including wearables, it added a total of 61,000 wireless customers.

All of this comes as Verizon prepares a major network overhaul to 5G technology. This next-generation cellular technology will offer a massive speed boost and a smarter, more responsive network that can connect thousands of different devices around us. But the transformation won't be quick.

Verizon has started to deploy its so-called 5G Ultra Wideband network. It's slightly ahead of schedule, with service available already in select locations in Chicago and Minneapolis, and it expects to have the service up and running in 30 cities by the end of the year. But so far, there's just one phone that can access the network, Motorola's Moto Z3. And covering entire cities or metro areas is likely to take a long time.

Now playing: Watch this: Verizon 5G speed test vs. 4G

While its main rival, AT&T, has been diversifying its business and expanding into new areas like entertainment, Verizon has been plugging away on its wireless business and has bet the farm on the promise of 5G. 

"We are leading the world in the development of new technologies with the launch of our 5G Ultra Wideband network," Chairman and CEO Hans Vestberg said in a statement. "Our ambition remains unchanged to provide the most advanced next-generation networks in the world."

For the first three months of the year, the company posted earnings of $1.22 per share, which beat analyst expectations of $1.17 per share, according to Yahoo Finance. Net revenues of $32.12 billion were essentially in line with analyst expectations, according to Yahoo.

Still, the news was good enough to get premarket trading up a slight 0.55%  to $58.70.