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Verizon Confirms New Home LTE Service
Also Confirms FiOS Build Essentially Over
by Karl Bode 12:04PM Monday Oct 24 2011 Tipped by Bob61571 See Profile
In September of last year a Pennsylvania resident gave us exclusive photos of a fixed residential LTE trial Verizon has secretly been conducting with DirecTV, providing speeds (albeit on a test network) of 27 Mbps downstream and 5 Mbps upstream. A few months after that a DirecTV executive accidentally confirmed the trials at an investor conference in New York, saying a residential LTE offering for rural users was several years out. We'd never seen Verizon confirm these trials until last week on the company's earnings call, when Verizon CFO Fran Shammo responded to a question about LTE. From the transcript (pdf):
quote:
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Citigroup Analyst: Is there any thought of taking that non-FiOS bundle of presumably LTE broadband LTE voice,what about taking that more nationally and making that more of a national product for you versus just maybe an out of FiOS region but in territory Verizon product?

Fran Shammo: Well, we are. And you're going to see that come in the fourth quarter with the -- what we now call the Cantenna which is not a commercial name obviously, but it's the antenna that we actually trialed with DIRECTV, which was extremely successful. And again, the benefit of this antenna is it operates the spectrum extremely efficiently. So if you look at a MiFi card or a dongle, this is very, very efficient, way above those two devices which is why it's critical to have that bundle with that Cantenna. So when we launch that you're going to see us go nationally with that type of an offer.
Verizon offering fixed residential LTE service isn't particularly good news for satellite broadband providers, but it may be good news for satellite customers who should be able to get faster service at a slightly lower price with slightly more reasonable caps. The question remains how capped and expensive this fixed LTE service will be, but with a fourth quarter launch we may not have long to wait for an answer. Shammo also confirmed that if you don't have Verizon FiOS now, you're likely not going to get it:
quote:
Now those lines that are outside that FiOS and outside of any potential of passing ever with FiOS we will continue to be competitive in this area but I think it's going to be around LTE. We're not going to invest a lot of capital in the copper core network in those outlying areas. But I think we have a strategic bundle that we can go into those households with, give them a better experience than their currently having on their DSL line from a bundling of the Wireless portfolio that we have. So that's the strategy that we're going to deploy.
There's a lot of significant Verizon markets including cities like Boston, Buffalo, Baltimore and Alexandria that aren't going to be particularly pleased to hear that. Eagerly waiting users in our forums aren't too happy, either. Verizon executives had been pretending they were pausing FiOS deployments while they improved uptake in already deployed markets. However, Shammo makes it clear the reality is FiOS deployment won't be "unpaused" -- because FiOS deployment is essentially over with the exception of already agreed franchise obligations. Verizon's new executive leadership simply doensn't think further upgrades are worth it.

Shammo's latest comments highlight a plan we've been talking about for many years, namely upgrading select FiOS markets, selling off unwanted DSL markets, then filling in the more rural and less profitable market cracks with LTE. Verizon offloaded a significant number of DSL and traditional phone customers to Frontier and Fairpoint the last few years, netting massive tax benefits while offloading huge debt loads to those companies (using Reverse Morris Trusts). The genius of Verizon's play all along is that the company can now return to those markets with a faster LTE broadband service that could win many of those customers back.


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