The 5G Dream Could Turn Into a Nightmare for Verizon
Verizon Communications (NYSE: VZ) has been a leader in the wireless space for so long that many believe the company will retain its lead once 5G goes mainstream. Customers and investors alike are reminded constantly about Big Red's network dominance. While Verizon seems to be the leader in 4G, the 5G race is far from over. The company relies on premium wireless pricing to generate significant free cash flow. If the company loses its network lead, Verizon's slow growth could turn negative as subscribers look for a better value elsewhere. Verizon's stock hasn't exactly set the world on fire over the last few years and this was with the benefit of a better network and pricing power. If the 5G race isn't led by Verizon, the company may be forced to cut prices to compete. Slower or negative growth, coupled with lower free cash flow, could leave Verizon investors seeing red.
When cellphones were mainly for phone calls, the best voice network was of utmost importance. As more people move away from traditional phone calls to Marco Polo, FaceTime, games and more, voice coverage is still important, yet data speeds are nearly as critical.
Source Fool.com
