Late in 2020, the Federal Communications Commission held an auction to sell the rights to use the airwaves for 5G. The bidders included the big three cellular carriers Verizon (VZ -0.42%), AT&T (T 0.21%), and T-Mobile (TMUS -0.07%). Each took home a swath of the airwaves, but the biggest winner was Verizon. The company will pay  $45.5 billion for its share of the rights.

5G, or fifth generation, advances the capabilities of 4G LTE, which improved speeds over previous generations and gave us video on our smartphones. With 5G, consumers can access data speeds 10 times faster than 4G LTE and new zero latency or buffering to all of their devices.

A toy bear and bull standing on a bar graph chart.

Image source: Getty Images.

As the carriers build out their 5G networks, the service can be extended beyond smartphones to home internet and edge computing, which enables the cloud. So far, though, Verizon's service has been met with mixed reviews. The bears and the bulls are looking at different aspects of the company to build their opinions. Here's what they're saying.

Bear case

Verizon is still in the early stages of building out its 5G network. Today, the service is available in densely populated U.S. cities. Verizon's goal with its build-out is to add new wireless customers seeking a better 5G experience. The 5G service comes with a higher price tag, though, and Verizon's new additions have been muted.

In the first quarter of 2022, Verizon lost 36,000 wireless  customers on a net basis. The second quarter was a bit better, but the company added a scant 12,000 net new wireless customers. Though this metric includes all of Verizon's services in addition to 5G, it's not a good sign for a company that is expected to be ramping up its 5G business.

Bull case

5G goes beyond just wireless smartphone service. Customers can also get 5G fixed wireless home broadband at some of the fastest speeds and most reliable service available. The customers in Verizon's still-limited coverage area have added the services in droves. In Q2 2021, Verizon added 23,000 fixed wireless internet customers. As the company continued to build its network throughout the year, it added 256,000 fixed broadband accounts in Q2 of this year.

The segment is still tiny compared to the size of Verizon's entire business, but there is a long way to go before the service fills out its entire coverage map. Before it's all said and done, home and business fixed broadband could grow to be a meaningful contributor to the company.

Verizon also has some ambitions to unleash its 5G service in the edge computing market. In simple terms, edge computing enables the cloud and data centers to operate more efficiently. With the massive growth in the cloud, Verizon believes its addressable market for edge computing and private edge networks is a whopping  $30 billion. The company has already partnered with Amazon AWS, Microsoft Azure, and Alphabet's Google Cloud, the three leading U.S. cloud players.

Which is the winner?

The bears present a case that relies on a short-term trend that could continue. The trend involves Verizon's bread-and-butter wireless service. So, continued declines could be meaningful. The bulls present a case for the long-term growth of the company. The stock is down 16% this year, indicating that the bears are winning for now. However, the bull case will take several years to play out. So, we might want to wait until we crown the victor.