We're already getting an indication that Verizon 5G is stealing customers from its competitors

Ericsson CEO Hans Vestberg speaks during a press conference on the first day of the Mobile World Congress 2015 at the Fira Gran Via complex on March 2, 2015 in Barcelona, Spain. The annual Mobile World Congress hosts some of the wold's largest communication companies, with many unveiling their latest phones and wearables gadgets.

  • Verizon began offering its 5G Home service to customers in four initial markets this fall.
  • At an analyst event in November, Verizon management said about half of the customers who signed up for 5G Home were not previous customers to Verizon.
  • The company previously implied that 5G is aimed at disruption in the cable industry and consumers interested in cord-cutting.

Verizon's initial test cities have been lit up with 5G, and we're already getting an indication that disruption is underway.

The telco giant began offering its 5G Home service to customers in four initial markets — Houston, Indianapolis, Los Angeles, and Sacramento, California — in October, choosing cities where Verizon is not the incumbent carrier, meaning there is room for growth in the market.

At a sell-side analyst event at Verizon's New York City office, Verizon management spoke about the initial results of the offering, sharing that about half of the customers who signed up for 5G Home were not previous customers to Verizon, "which they have been surprised by considering the notable discount for Verizon customers," Cowen analysts wrote in a research note.

Verizon did not share underlying details about what type of companies they were stealing share from, whether that be cable companies or telcos that offer service in the area, according to Cowen. Verizon declined further specifics about the service when contacted by Business Insider.

But the share stealing from other companies was likely welcome news to Verizon execs, as it reinforced a similar point they've been making all year.

"Verizon 5G Home is ideal for consumers looking to 'cut the cord' or upgrade from their current cable service," Verizon wrote in a release in September.

Cable companies provide fixed-line broadband to homes, or internet delivered through cables that connect to a modem. 5G fixed-wireless broadband uses radio signals and the installation of an antenna outside of the home to deliver internet.

Offering fixed-wireless broadband may be a potential way for telcos to fight back against cable companies, which are increasingly stealing broadband customers away. Bolstered by a strong economy and a growing necessity for a fast, persistent, in-home internet connection, analysts see continued growth opportunities for cable.

"Telco should lose the long-term battle [for broadband] with an inferior price-value proposition as consumers will demand higher speeds," Cowen analysts wrote in an October report.

Typically, cable companies have faster, more reliable service than telcos because of the underlying technology.

In the telecom sector, the cheapest option for broadband access is typically DSL. DSL — digital subscriber line — is a service that's provided over a copper wire. This type of service is slow and unreliable with limited ability for streaming. The cheapest option at cable companies, on the other hand, is offered over a coaxial cable. That means faster speeds and more reliability, but often at a higher price. Fiber is the fastest and most costly option, and is offered by both cable and telecom companies.

But 5G could be a game changer. Verizon has promised that 5G Home customers should expect typical speeds of about 300 Mbps, with peak speeds of 1 Gbps. It currently costs $70 a month, $50 a month for Verizon customer.

Verizon's 5G broadband offering isn't the only strategy that seems aimed at disrupting the cable industry.

Verizon announced that it would include a free Apple TV 4K and three months of free YouTube TV service along with 5G service to customers in each of its four initial markets. The bundling of residential broadband service and live TV implies that customers would be able to cut linear-TV subscriptions to get similar programming for free.

"When we started to design the 5G, we decided we'll have a cordless world," Verizon CEO Hans Vestberg said on CNBC in August. "You're going to get the connectivity that is 100% all of the time and the speed that you have never seen before wireless."

SEE ALSO: Verizon's betting big on Yahoo Finance, but the site's built on a cohort of 'permalancers' that former employees say is demoralizing and bad for business

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Contributer : Tech Insider https://ift.tt/2zwpmOL
We're already getting an indication that Verizon 5G is stealing customers from its competitors We're already getting an indication that Verizon 5G is stealing customers from its competitors Reviewed by mimisabreena on Friday, November 30, 2018 Rating: 5

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