5G Could Make Verizon and AT&T Fixed Network Service Providers Across the Entire U.S. Market

Fixed wireless is a bigger deal for Verizon than it is for AT&T. But  fixed wireless is a big deal for both firms.

The reason is partly regulatory in nature. No U.S. fixed network telecom service provider (including cable TV companies) ever has been allowed to reach more than about a third of all U.S. homes.

Verizon’s fixed network reaches far fewer than that. Assume there are about 118.3 million U.S. homes. Assume Verizon passes about 23 million of those locations (after the sale of about 3.7 million voice connections, 2.2 million high-speed data customers and 1.2 million video customers. or about 19 percent of U.S. homes.

AT&T, in contrast, passes about 62 million U.S. homes, or roughly 52 percent of U.S. homes.

So fixed wireless, enabled by 5G, dramatically changes each firm’s reach. Where Verizon could only sell to about 19 percent of U.S. homes on a fixed network basis, while AT&T could reach about 52 percent of homes, 5G fixed wireless could, in principle, allow each firm to sell fixed network services (internet access, video, fixed network voice) to nearly every U.S. home, for the very first time.

That could be hugely significant, if you assume each firm has done about as well as it possibly can, in their fixed network service territories. As often is the case in telecommunications, growth can be gotten only by moving “out of region.”

In the 5G era, both Verizon and AT&T will have the ability to add new “fixed network equivalent” accounts in half to 80 percent of the U.S. territory, for the first time.

So it might be a virtual certainty that AT&T and Verizon will gain market share “out of region.”

“We could be a significant player for delivering broadband and video over-the-top, over that exact same network, and it's almost I mean incrementally and the cost is miniscule to be able to address a very large market outside of the Washington and the Boston corridors,” said Lowell McAdam, Verizon CEO. “You are then a broadband provider and a TV provider outside of your franchise footprint.”

That is a big reason Verizon is so big on fixed wireless enabled by 5G. " We did not need to wait for all of the mobile standards, we didn't have to wait for it to be...crammed into an iPhone or a Samsung Galaxy device,” said McAdam. “You can use basically your home router that you have today, just put some different chips in it, and we're working with Intel on that, and you are then a broadband provider and a TV provider outside of your franchise footprint.”

But fixed wireless also will have the same attraction for AT&T, which operates a fixed network reaching about 52 percent of U.S. homes. In much the same way, the DirecTV acquisition now allows AT&T to sell linear video to nearly 100 percent of U.S. homes.