Finance

Verizon: Quad Play Isn’t What Subs Want

U.S. consumers prefer discounts to bundled wireless, executive says 1/09/2017 8:00 AM Eastern
Verizon's Marni Walden: “The quad play is overrated in the U.S. unless it is deeply discounted.”
TakeAway

Verizon isn’t enthusiastic about the quad play of voice, video, data and wireless service, a telco executive told an industry gathering.

Despite a handful of mobile virtual network operator (MVNO) agreements by companies to resell wireless service, Verizon Communications executive vice president and president of product innovation and new businesses Marni Walden said the telco has no appetite for its own quad play.

 

At the Citibank Internet, Media & Telecommunications conference in Las Vegas, Walden seemed to shut the door on a possible combined wireless, voice, video and data product offering. Verizon, through its 2011 purchase of wireless spectrum from cable consortium SpectrumCo, agreed to MVNO agreements with the operators as part of that deal. In the past year, Comcast and Charter have said they have exercised those MVNO rights. Comcast expects to offer a wireless product later this year.

 

Walden said that concept of the quad play, though popular in Europe — Liberty Global is a big proponent — makes less sense in the U.S. market.

 

COST SAVINGS IS KEY

Walden said that through Verizon’s customer research, what subscribers most want out of a product bundle is price discount.

 

“The quad play is overrated in the U.S. unless it is deeply discounted,” Walden said at the Jan. 5 gathering, adding that is something Verizon does not intend to do.

 

More important is the telco’s fiber network and its plans for a next generation 5G wireless offering.

 

Verizon CEO Lowell McAdam said last year that the telco could start 5G trials as early as the first quarter of 2017.

 

5G networks could deliver blinding broadband speeds — up to 10 Gigabits per second, 10 to 100 times faster than traditional wireline data networks.

 

RELATED: Verizon Touts Progress on Next-Gen FTTP

 

The first product offering on the 5G platform will most likely be a fixed wireless offering, Walden said, which could take the form of a connected home product or a bundled video offering.

 

Other telcos have jumped into the 5G fray as well, with AT&T saying it would test a 5G service to deliver its DirecTV Now over-the-top service in Austin, Texas in the first half of the year.

 

The Austin trial will involve residential customers in the area. It will also include other unspecified next-generation entertainment services and devices and is expected to enhance AT&T’s understanding of the technology. That also includes how the fixed wireless technology handles heavy video traffic, according to a company statement. Some DirecTV Now customers have complained of spotty service after its November launch.

 

The excitement over 5G is widespread: Charter Communications CEO Tom Rutledge mentioned its potential to deliver speeds of 10 Gbps for cable over hybrid wireless wireline networks in a conference last year. But the service isn’t expected to reach full commercial deployment until 2018 or 2019.

 

“We’re not waiting until the final standards are set to lay the foundation for our evolution to 5G. We’re executing now,” AT&T chief strategy officer and group president, Technology and Operations John Donovan said in a statement.

 

Charter Communications hasn’t said specifically when it would begin to offer a service based on the MVNO agreement — Rutledge had said it could come in 2017 or 2018. But the Charter CEO said at the Citi conference last week that he’s confident the cable company can compete, adding that he believes Charter can squeeze 10 Gbps speeds out of its existing coaxial network.

 

“We’re not only developing coaxial 10 Gbps symmetrical services, but we’re developing new platforms inside the fiber optic network that ensure the backhaul capacity is there to match the coax,” Rutledge said at the Citi conference. “We think we have the best network to build the next generation of wireless services.”

 

MORE YAHOO SKEPTICISM

Walden also cast some doubt on the future of the Yahoo deal. Yahoo revealed in December a second data breach — this time of about 1 billion email accounts — which Verizon is currently investigating.

 

Walden said the fundamental reason for the merger still exists — to build scale.

 

“This is really about taking the audience from hundreds of millions to the billions,” Walden said. “That still remains important to us.”

 

The investigation continues, she added, noting that several questions need to be answered, including whether there have been any changes to the Yahoo asset.

 

“With time we will have answers to those questions,” Walden said. “We will be very responsible about what we do to make sure we are getting the value out of the assets and doing the right thing for our shareholders.”

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