Verizon Wireless is beginning to market a wireline voice replacement product, Home Phone Connect, which allows customers to port their home phone number to Verizon Wireless. With Home Phone Connect, subscribers connect their home phones directly to the Home Phone Connect device, and bypass the PSTN for their home phone service, using Verizon’s wireless network to complete calls. Obviously, wireless coverage becomes an issue.

Think of it as a wireline voice femtocell, which uses the traditional wireless network, rather than broadband for access. Verizon Wireless intends to charge $20/month for unlimited calling. Customers can also opt for a $10/month plan, which acts as an additional wireless line on their wireless account. Calls on the $10/month plan count against the subscriber’s wireless minute plan, while they do not count against any plan with the $20/month option. The actual device retails for $129, but is free with a new two year subscription. There is also a $35/month activation fee, which Verizon is currently waiving.

It’s an interesting move by Verizon Wireless. One that they hope allows them to continue to squeeze out margin from their wireless facilities. As Verizon and other wireless providers shift to 4G networks, which are data centric for both voice and broadband, their legacy 2G and 3G networks are still available for voice capacity. By marketing a voice only wireline replacement service, they are in effect leveraging that legacy voice capacity for additional margin. A handsome margin I would assume. As a result, I suspect we’ll see more infringement on the declining wireline voice business from hungry wireless providers looking to leverage their legacy wireless voice networks.

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9 thoughts on “Verizon’s Home Phone Connect Latest Assault on Wireline, Expect More

  1. A couple of weeks ago, as I drove home with my family from a couple days at the Great Wolf Lodge in Dallas, I was very conscious of how incumbents who don’t embrace and accelerate change are gobbled up by it . . . My wife was reading about Borders filing for bankruptcy ON HER KINDLE in a newsletter that she had downloaded minutes before via Kindle's FREE 3G DOWNLOAD SERVICE . . . Two of my daughters were watching two different movies on my wife’s and my iPhones via HULU STREAMING VIDEO OVER AT&T 3G USING OUR MYFI APPLIANCE . . . and when we stopped for a snack, I participated in a videoteleconference VIA SKYPE USING FREE WIFI IN PANERA BREAD.  Then, when we got home, our land line telephone rings and my wife answers it on her iPhone because all of the calls are forwarded automatically . . . the iPhone is a 21st century device while our cordless wireline phones are at best 1990s technology.  As a consumer, I am thrilled with all of these developments. And, as a consumer, I would be surprised and disappointed to find that my local phone service provider would try to prevent me from getting them?  

    1. Great perspective Steve. All service providers need to be cognizant of consumer demands, evolve accordingly, and hopefully continue to have a viable business model in the process. Not an easy task in this environment, given all the moving parts, business model and regulatory/policy wise.

  2. This will most certainly be a real challenge to rural telephone companies who have spent millions over the years providing rurual, non-wanted, customers with the latest technologies.
    Too bad we never had a fighting change to win a bid on wireless airwaves in our areas. We would have had our areas 100%+ covered 10 years ago.

  3. Amen, AJP! Maybe you could let Bernie and Steve Collier know about all the regulation the Rural Telephone Companies are bound too by the State Public Utility Commissions. All the whilst the wireless carrier have no regulation, and no consequences when they fail the customer.

  4. It's always been much harder and more expensive for the rural telcos and rural electrics to get the job done . . . sparse population, difficult terrain, less infrastructure already in place, slow adoption rates, minimal ROI . . . that's what makes us so special . . . and what got us those good USF and LDAF $$ for all those years . . . today's customers in the "flat world" don't really care how difficult our business is . . . they just care about how good our service is . . . again an area in which we have proven that we can excel way beyond the majors . . . if we don't do it, somebody else will, eventually, and not nearly as well.

  5. While I dont disagree on the challenges that rural telcos face, I did just switch my parents' landline to VZW Home Phone Connect (irony…their landline was a former Verizon/now Frontier landline). Frontier was just ok, no different than when Verizon owned the copper.

    The issue is cost. Frontier was $36 with taxes for basic local service and call waiting. With Home Phone Connect, they now add unlimited long distance, voice mail, 3way calling, callerID, and retain call waiting — all for 33% LESS than Frontier. In the near year since Frontier assumed control of the old Verizon landline, they made not one promotional offer or attempt to enhance the service or lower the price. I know landlines have a different regulatory framework, but companies in this competitive and economic environment have to devise approaches to retain customers.

  6. For an unwanted customer, they have never refused to let me send them my cash.

    For the last several years I've repeatedly been told that DSL would soon be available to me. My next door neighbor 300' away, has had DSL for several years. Sorry Telco, but I just switched to home phone connect and a mifi device because I'm tired of waiting and it is my way of sending a message.

    Last time I called my Telco to ask about DSL they told me they didn't care about just a few customers complaints, but if I would submit a 100 signature petition to the county planning commission, they would then listen.

    My advice: Quit whining, keep up or go home.

  7. When you deciide to contact Verizon regarding different plans or Verizon devices that work with those plans — first go to the Verizon website and review those devices,eg., the Hot Spot, or the Telephone Connect.. Make sure you understand how and why they work, (as well as what they will not do.). Then contact or visit your Verizon store. Ask lots of questions, get the specific information , If you have the good fortune to have several Verizon stores in your area , visit all of them. Also the Verizon Customer Service provides information. I have found that different folks can give you some varying information. You determine who provided the correct information !!

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