As accustomed as we might be to seeing Google, Netflix, Amazon, Facebook, cable TV companies, wireless internet service providers, metro fiber specialists or T-Mobile US as market attackers and share takers, we are unaccustomed to seeing either AT&T or Verizon in such roles.
But Verizon is about to take that role, in fixed networks.
Verizon is launching Verizon 5G Home, its 5G fixed wireless service, on October 1, 2018 in parts of Houston, Indianapolis, Los Angeles and Sacramento, providing the first U.S. real-world test of customer demand for 5G fixed wireless.
And Verizon has specific business reasons for doing so. Simply, footprint, or homes passed, in its fixed networks business is a key driver for Verizon. Simply put, Verizon has far fewer homes passed than its major fixed network competitors.
Comcast has (can actually sell service to ) about 57 million homes passed. Charter Communications has some 50 million homes passed.
AT&T’s fixed network represents perhaps 62 million U.S. homes passed. Verizon, on the other hand, passes perhaps 27 million homes passed.
As dominant as Verizon is in the mobile services segment, it lacks scale in the fixed networks segment. And that means Verizon can gain revenue by taking market share in the fixed network business.
The companion issue is simply that, similar to Spring and T-Mobile US, Verizon’s revenue is heavily weighted to mobile services. As much as 69 percent of Verizon’s revenue is earned from mobility services. That is less than Sprint or T-Mobile US earn from mobile services, but is highly significant, as it means Verizon, the biggest revenue producer in U.S. mobile, has less room to grow.
As cable companies have fueled growth by taking market share in voice services, business services and internet access, so Verizon expects to take share in fixed network internet access.
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