Verizon Communications Inc (NYSE: VZ) paid $8.2 billion to the U.S. Treasury Wednesday and intends to raise an additional $36 billion in debt to fund the airwaves payment, according to reports out this morning from Bloomberg.
Verizon raised $12 billion in a bond sale in November and has set up a $25 billion bank facility to cover the major airwaves investment.
The wireless carrier competes with rival T-Mobile US Inc (NASDAQ: TMUS) to expand market share in vital mid-band frequencies crucial to the new 5G wireless services. Verizon emerged as the highest bidder at $45 billion in the 5G spectrum auction last month.
Reports are circulating the carrier plans to double its revenue growth to 4% by 2024 by tapping the 5G wave. Therefore, it earmarked an additional $10 billion in capital expenditures over three years to take care of the 5G expansion plans' incremental costs. The incremental costs are expected to cut profit by 10 cents a share in 2022 and 20 cents a share in 2023.
The airwaves are credited for their capability to travel a long distance and carry massive data. They are estimated to drive new revenue growth potential upon deployment for next-generation mobile devices, autonomous vehicles, health-care equipment, and manufacturing facilities.
Verizon plans to cover 100 million people with its new 5G C-band and millimeter-wave networks by year-end and reach coast-to-coast coverage by 2024.
Verizon Communications will hold its 2021 Virtual Investor Day today.
Shares in VZ surrendered 68 cents, or 1.2%, Thursday morning to $56.40.
