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Why Verizon Is So Focused on Network Densification

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Jan. 10 2018, Updated 9:02 a.m. ET

Verizon’s network performance

Verizon Communications (VZ) is continuing to push for network densification using small cells. The network performance of any telecom company plays a crucial role in customer retention. Verizon has demonstrated that its network advantage can drive subscriber growth—even with premium pricing.

During the UBS Global Media and Communications Conference on December 5, 2017, Matthew Ellis, Verizon’s CFO (chief financial officer), spoke about Verizon’s network performance, noting that the company is content with its current spectrum position, with ~50% of its portfolio supporting LTE (long-term evolution).

Additionally, VZ’s management expects to re-farm its PCS spectrum in the coming years while deploying unlicensed and LTE-A technologies.

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Verizon is also concentrating on SDN (software-defined networking) and NFV (network function virtualization) technologies to transform its network. SDN helps telecom carriers by providing enhanced flexibility and cost savings, as this technique requires them to virtualize their network as an alternative to spending on dedicated fixed hardware.

RootMetrics

Verizon has demonstrated industry-leading performance across different network performance categories. According to RootMetrics’s first half of 2017 RootScore report, Verizon secured the top spot in all the six network performance categories: data performance, call performance, network speed, text performance, network reliability, and overall performance.

Notably, Verizon took the overall network performance award for eight consecutive test periods, according to the same report. Verizon earned a score of 94.5 for overall network performance, compared with AT&T’s (T) score of 92.9, Sprint’s (S) score of 87.9, and T-Mobile’s (TMUS) score of 86.5.

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