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Technology Stocks : Verizon Communications (VZ)
VZ 52.67+0.6%5:05 PM ESTNews

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WSJ -- Verizon to Sell Home Broadband Over Wireless Network ...........................


Nov. 30, 2017


Verizon to Sell Home Broadband Over Wireless Network

In challenge to cable, company to provide high-speed home internet in some cities next year



By Ryan Knutson

Verizon Communications Inc. plans to start selling home broadband service over its wireless network in late 2018, a move to challenge the cable industry’s grip on Americans’ internet access.

Verizon said Wednesday it will sell high-speed internet access in three to five cities, starting in Sacramento, Calif. The cities are all expected to be outside Verizon’s existing landline footprint in the Northeast. The company said more details, such as its price, would be unveiled later.

The wireless giant will use fifth generation, or 5G, technology, which is capable of delivering significantly faster internet speeds than existing 4G technology, also known as LTE. Customers will likely have to place a box in their windows that will convert Verizon’s wireless signals into Wi-Fi inside the house.

If the technology works, and users adopt it, it could result in more competition in the home internet market. Many Americans only have access to one broadband provider, often a cable company. By selling outside its existing footprint, Verizon could enter cities as a new competitor.

Comcast Corp. is the country’s biggest broadband provider with about 25 million subscribers, followed by Charter Communications Inc. with about 23 million, according to Leichtman Research. The duo account for almost half of all U.S. broadband connections.

Legacy landline phone companies, like AT&T Inc. and Verizon in some places, still sell internet over traditional phone lines. Copper-based services, such as DSL, deliver much slower internet than cable. They also sell broadband over fiber-optic networks in some cities. Overall, AT&T has nearly 16 million broadband customers while Verizon has 7 million, Leichtman says, including business connections.

Using wireless networks for home internet poses many challenges. Wireless carriers must install more antennas much closer to every house. While it’s still unclear exactly how many antennas will be needed, it’s possible that small antennas will be installed on lamp posts, and those antennas will beam the internet into the home.

Wireless signals on 5G are much more fickle than current LTE technology. 5G signals, for instance, can be disrupted by tree leaves or a large truck that parks in the driveway. Verizon has held residential trials in 11 markets this year to calibrate the technology.

Verizon isn’t the only company working on this type of technology and standards for 5G networks are still being sorted out. AT&T has active trials in several cities, and Webpass, which was acquired by Alphabet Inc.’s Google, also sells internet using a similar model.

Verizon spent more than $20 billion a decade ago building out fiber-optic cables into millions of U.S. households. But ripping up roadways and front lawns to install a wire to every home is expensive, and Verizon in recent years has sold off many of its wireline assets.

In some rural areas, wireless carriers already use their existing wireless networks to sell home internet, but it’s expensive and the data plans resemble traditional wireless plans with strict data caps and sluggish speeds.


Write to Ryan Knutson at ryan.knutson@wsj.com


Copyright © 2017 Dow Jones & Company, Inc.

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