In 2018, Verizon launched a Fixed Wireless Access product known as “5G Home”, its alternative to wired home broadband. 5G Home is currently available, in 18 cities across the United States. Specifically, these cities include Anaheim, Arlington, Atlanta, Chicago, Dallas, Denver, Detroit, Houston, Indianapolis, Los Angeles, Miami, Minneapolis, Phoenix, Sacramento, Saint Paul, San Francisco, San Jose, and St. Louis.
Verizon uses its high band (millimeter wave) 5G spectrum, which Verizon brands as Ultra Wideband, to provide connectivity for its 5G Home service. Specifically, Verizon uses spectrum on the high-band, 28 GHz frequency.
Over the next 5 to 8 years, Verizon plans to cover 30 million households in the United States with 5G Home services. Additionally, 5G Home can be marketed beyond home broadband, for small- and medium-sized businesses, making it an enterprise proposition as well.
5G Home service is offered under no contract and delivers speeds of 300 megabits per second. Pricing for Verizon customers is $50 per month, while pricing for non-Verizon customers is $70 per month.
Verizon’s Network – Mobility and Fixed Wireless Access
Historically, Fixed Wireless Access, as a business model, has failed in countries around the world because of one simple reason – it was built on its own, separate network. However, Verizon is taking a different approach. 5G Home utilizes Verizon’s 5G Ultra Wideband network, on high-band (millimeter wave) spectrum. Therefore, it is built on the same multi-use network infrastructure which carries Verizon’s Mobility customers. Indeed, the same network, base stations, and antennas power Verizon’s 5G Home and Mobility service.
Verizon’s Self-Setup Process for Equipment
After a customer orders 5G Home from Verizon.com, they receive the Customer-Premises Equipment (CPE) to self-install the product, known as “Self-Setup”. Self-Setup avoids the need to wait for an appointment with a Verizon technician, to activate the service. Customers can use their smartphone to download the My Verizon app which guides them through the installation process:
- Attach the receiver to a window and the app will highlight where the strongest signal coverage is in the home
- After placing the receiver on the window, a router will be paired with the receiver, using the app
- Check the speed of the connection by running a speed test
- Wi-Fi extender can be setup via the app and used to extend the 5G coverage further in the home
- Personalize network credentials for the router
Next Generation Customer-Premises Equipment from Qualcomm
Verizon has made additional enhancements to its Fixed Wireless Access (5G Home) Customer-Premises Equipment, using new chipsets from Qualcomm. New chipsets for the Customer-Premises Equipment give 5G Home higher power output and thus enable it to receive better signals, which in turn enhances coverage. As a result, Verizon is able to have larger network grids covering cities. In turn, Verizon can increase its addressable market to sell 5G Home into.
In February 2020, Qualcomm released its Snapdragon X60 5G modem and RF front end system (Modem-RF System). This new Modem-RF System will provide 2x greater coverage radius, and better indoor propagation, which is important on high-band (millimeter wave) spectrum.
Another benefit to Verizon of having the higher-powered Customer-Premises Equipment is that the proportion of customers choosing Self-Setup will increase. This is because finding the 5G signal and being able to receive a strong signal from the Customer-Premises Equipment in different places of homes will become easier. In turn, more customers will successfully perform Self-Setup.
Fixed Wireless Access – Verizon’s Alternative to Cable
5G Home, is a cheaper alternative to wired home broadband from the major cable providers in the United States. Verizon’s strategy for 5G Home centers around taking market share from the largest cable providers in the U.S. Specifically, these cable companies include Comcast, Charter, Cox, and Altice (through Optimum and Suddenlink).
Additionally, Verizon will have a sustained cost advantage over the cable providers given that during its roll-out of services to customers, it does not have to dig-up trenches to each customer’s home, in order to lay cable. Therefore, Verizon’s physical cost per home passed, is lower as a result.
Within three years, Verizon stipulates that the wireline and wireless business will not function in the same way it does currently. Verizon will have a service offering where a customer can buy two pieces of equipment: i) handset for its Mobility services and ii) 5G Home. Whichever equipment the customer purchases, they will receive the same high-speed, high-quality ubiquitous connectivity. Each service offering will be billed as another line on the customer’s Verizon account.
Additionally, 5G Home will be transportable, wherever the customer is in the United States. Therefore, 5G Home enables users to bring the 5G Home equipment with them on vacation or to their second home.
One of the biggest risks for a home broadband provider is when a customer moves homes. This is because it is typically a frequent churn event. In contrast, as the footprint of Verizon’s 5G Home increases, customers can simply unplug their Customer-Premises Equipment and move it to their new home.
Indeed, the customer’s Internet service would be up-and-running again quickly. With this type of flexibility, customers will begin to think of home broadband as more akin to a smartphone or laptop, as opposed to a physical utility, that cannot be moved.
Chicago Case Study – Verizon Mobility Roll-Out Transitions to 5G Home
Verizon turned on its 5G Mobility services in Chicago in April 2019. The carrier’s initial build-out was concentrated on coverage of where the highest network usage was. Indeed, this high network usage was in the central business district and the areas surrounding the city.
Throughout the course of 2019, Verizon expanded coverage across Chicago to cover an area 3x that of the initial launch area. Coverage was provided, initially, for its 5G Mobility services. However, after a critical mass of coverage was achieved, in October 2019, Verizon also launched its 5G Home services for Chicago. Following Verizon’s coverage expansion in Chicago, the carrier began to add capacity to its Chicago network.
Work From Home – Accelerating Verizon’s 5G Home Value Proposition
Verizon’s Fixed Wireless Access (5G Home) value proposition has been accentuated by the recent “Work From Home” environment. Examples of two of these qualities include:
(1) Verizon Does Not Own Content as a “Principal”
Therefore, Verizon can provide its customer a choice in how they want to bundle their 5G Home services. For example, bundling can include including Disney+, YouTube TV or Google Stadia (cloud gaming service).
(2) Verizon has Uncontended Capacity for its Users
Verizon has 2,000+ MHz of nationwide high-band (millimeter wave) spectrum capacity. In contrast, with cable companies, users have contended capacity. Indeed, for users working from home, they realize that when their neighbors are at home, they are sharing some of that bandwidth capacity with other people in the area.
For example, if you purchase speeds of 1 gigabit per second from a cable provider and your neighbor also purchases speeds of 1 gigabit per second, you both will not have speeds of 1 gigabit per second on cable. This is because cable has “contended capacity”. In contrast, Verizon’s 5G Home offering has uncontended capacity. Therefore, users will not have the same capacity constraints as wireline broadband services.
Summary of Verizon 5G Home (Fixed Wireless Access)
Verizon’s 5G Home provides the value proposition of consistent, high-quality and high-throughput. Indeed, this is particularly relevant as more and more devices will be connected at home. Furthermore, this proposition is particularly important for consumer use cases like online gaming, where latency and capacity are paramount. Additionally, for business uses cases such as video conferencing, where uplink is as important as downlink, Verizon’s 5G Home services excel.