Carriers serving areas where Verizon Wireless is available take heed. Verizon Wireless announced today that it is making its HomeFusion fixed wireless LTE offering available throughout its LTE footprint. That footprint currently covers 230 markets or about two-thirds of the U.S. population—and Verizon has said that it plans to build out LTE everywhere that it currently has 3G.
According to Verizon Wireless, HomeFusion supports speeds of 5 Mbps to 12 Mbps on the downlink and 2 Mbps to 5 Mbps on the uplink. At those speeds and at prices ranging from $60 to $120 monthly for between 10 GB and 30 GB of data, the service probably isn’t a big threat for customers that have higher-speed DSL, cable modem or fiber-to-the-home service. But the offering could be an attractive alternative to lower-speed DSL or satellite broadband. (HomeFusion customers who exceed their data cap will pay $10 per extra GB.)
HomeFusion was launched back in March in three markets, with another three added subsequently. A Verizon Wireless spokesperson declined to provide information about who’s buying the service. But the nationwide launch, following so quickly on the initial rollout, suggests the service is meeting or beating target take rates.
The first six markets where Verizon Wireless launched HomeFusion followed a pattern we have also seen with its cable company co-marketing partnerships. All of the announced markets were in areas where Verizon, the landline company, is not the incumbent local carrier.
But with today’s launch, Verizon Wireless has positioned itself to compete directly with its own landline business. HomeFusion probably isn’t much of a threat in FiOS markets, but it could further accelerate the decline of Verizon’s shrinking DSL base. The decision to go nationwide with HomeFusion likely was already made when Verizon revealed two weeks ago that it would no longer promote DSL.
Some industry observers have noted that since Lowell McAdam took over as Verizon CEO less than a year ago, he has viewed wireless as the company’s future. Bernstein Research analyst Craig Moffett went so far as to suggest that McAdam was throwing the landline business under the bus.
Moffett has been one of Verizon’s most vocal critics, arguing for example, that the company does not return its cost of capital and that the landline side of the business continues to lose traditional voice customers and must spread its fixed costs over a dwindling base. Apparently McAdam is taking that critique seriously. Some people have suggested that the company may eventually look at shutting down its landline plant.
It’s worth noting that HomeFusion will be installed by a company called Assurion, which means that if HomeFusion ultimately begins to replaces Verizon’s landline plant, the carrier also could find it has a lot few headaches involving union contracts.
It’s also worth noting that in some areas where Verizon Wireless does not plan to build out LTE service the company is working with rural carrier partners who will lease spectrum from Verizon to build their own networks that will interoperate with Verizon’s. As of now those carriers do not have access to the special antenna that supports HomeFusion, but one of the rural program participants told Telecompetitor this week that he is hoping that the HomeFusion equipment will be made part of the rural program in the future.
