5G Is All the Rage. Verizon Is All the Yawns.

(Bloomberg Opinion) -- Verizon Communications Inc. is the wireless industry's sleeping giant. Suddenly, its smaller rivals – AT&T Inc., T-Mobile US Inc., Sprint Corp. and Dish Network Corp. – are giving it every reason to wake up.

Shares of Verizon have been a snooze this year, as AT&T steps up the competition and the drama around T-Mobile's merger with Sprint continues to dominate the news. On Thursday, Verizon said it added 451,000 wireless subscribers during the second quarter, which was much better than analysts were expecting and helped lift its stock price. However, AT&T, in its own earnings report last week, crowned itself America's “fastest, best and most reliable network,” based on scoring done by GWS OneScore, Ookla and PC Mag. Ouch, Verizon.

Of course, at this point, there's not actually much of a difference among the national carriers' networks when it comes to 4G LTE service – it's more about bragging rights for TV ads. Plus, 5G connections are already being rolled out. Verizon has made 5G available to customers in parts of nine cities, including Atlanta, Chicago, Denver, Indianapolis and Providence, Rhode Island. Still, its launch has been clouded by concern that the company is betting on the wrong kind of wireless spectrum for 5G. And so for every pro there seems to be a con.

Verizon controls the biggest share of the U.S. wireless market, and it certainly has the deep pockets needed to protect that. That hasn't stopped it from getting lost in the shuffle this year. The U.S. Justice Department last week made the controversial decision to approve T-Mobile's acquisition of Sprint, which has been the talk of telecom town. The deal is conditional on the companies divesting certain assets to Dish Network, the satellite-TV provider, so that it can become a new competitor in the wireless market.

There are those who believe the T-Mobile-Sprint merger and the arrival of Dish will increase industry competition, which would be interpreted as bad news for Verizon. I'm of the camp that Dish probably won't be much of a threat, at least not for a long time, and that the temptation for T-Mobile to take advantage of its newfound pricing power will be too great to ignore. In that case, Verizon would seem to benefit, if not for this one major consequence: Dish, and its valuable unused mid-band spectrum licenses, are now technically off the market. Those assets would have been attractive for Verizon to buy.

As Verizon gears up for 5G, it's instead relying almost exclusively on finicky millimeter-wave spectrum. While these frequencies can transport lots of data at the lightning-fast speeds that people imagine when they hear “5G,” they can travel only short distances, making them impractical for less densely populated areas. That means Verizon has to focus on urban zones. “The experience in urban areas is going to be fantastic,” CEO Hans Vestberg said at an investor conference in May. The company wants to ensure that it's offering something “truly transformational” for customers, Adam Koeppe, Verizon's senior vice president for technology strategy, said at another conference that month. He means for certain customers if they're standing in the right location. Dish's spectrum could have helped Verizon blanket broader geographic areas with 5G service.

In contrast to Verizon's approach, the other carriers are using millimeter waves in combination with low- and mid-band spectrum. Those different frequencies together provide a better mix of capacity and coverage. Like Dish, Sprint also has a stack of these desirable lower-spectrum bands, which T-Mobile gets to be the beneficiary of (unless the states suing to block the merger win their case). To be fair to Verizon, all its rivals are more interested in bringing 5G to bigger cities first because it's less costly to do so and offers better returns.

It's too early to start grading these nascent 5G networks. But Verizon needs to wake up and smell the competition. As for Thursday's earnings, yawn.

To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tara Lachapelle is a Bloomberg Opinion columnist covering deals, Berkshire Hathaway Inc., media and telecommunications. She previously wrote an M&A column for Bloomberg News.