Get ready to hear more about 5G from Verizon.
The company is preparing for the commercial deployment this year of its next-generation wireless network, which will eventually serve as a replacement for broadband internet service. The company is set to spend $17 billion to $17.8 billion this year on capital projects, which includes its work on 5G.
5G has become a favorite topic for Verizon because, well, it gets people excited about wireless service again. And Verizon needs a little excitement, as the company posts another decent, but unremarkable, financial quarter.
The telecommunications giant's growth exceeded Wall Street expectations, but signaled that competitive pressures persist. The company added a net 1.2 million post-paid wireless connections -- or accounts in which customers pay at the end of each month -- in the fourth quarter.
Those post-paid connections included 431,000 mobile phones, 193,000 tablets and 550,000 other connected devices, which Verizon noted were "led by wearables." Verizon's 431,000 net mobile-phone customers included a loss of 216,000 basic mobile phones, offset by a gain of 647,000 smartphones. The growth from tablets and connected devices like the Apple Watch appears substantial but often yields less revenue because the monthly charges are lower than for phones.
The numbers underscore the trend of competitors T-Mobile and, increasingly, Sprint starting to win business from Verizon through more aggressive offers and promotions. T-Mobile throws in a myriad of freebies into its service, while Sprint touts plans that are half the price of Verizon's offerings. Verizon has long touted its network superiority, but customers are increasingly factoring price into the equation.
Still, the customer growth numbers for the fourth quarter suggested Verizon weathered the iPhone switching storm. The fourth quarter typically sees a flurry of movement from consumers as they consider new carrier options when upgrading to a new iPhone. But this past quarter saw few jaw-dropping promotions, such as 2016's, that caused people to jump ship.
"Verizon posted a strong wireless quarter with better additions and revenue," said JP Morgan analyst Philip Cusick.
Considering wireless growth, it's no wonder Verizon is so excited about 5G. The next-generation wireless technology could get the company into new businesses, from expanding the number of people who can be offered a broadband connection to longer term projects focused on smart cities and self-driving cars.
But for now, Verizon's business focuses on its core telecom efforts and its expansion into the media world with its AOL and Yahoo assets, now rebranded Oath.
In total, Verizon reported a fourth-quarter profit of $18.8 billion, or $4.56 a share. Excluding one-time items, the company reported earnings of 86 cents a share, in line with a year ago. Revenue rose 5 percent from a year ago to $34 billion.
Analysts, on average, forecast earnings of 88 cents a share and revenue of $33.3 billion, according to Yahoo Finance. Investors liked the results. Verizon shares rose 2.6 percent to $54.85 in pre-market trading.
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