Verizon Officially Launches LTE for Fixed Broadband Services with HomeFusion

On Tuesday March 6, 2012, Verizon announced the official launch of its HomeFusion service – an LTE-based broadband solution targeted at households that cannot get another type of fixed broadband – such as DSL, Cable or Fiber.  The service was expected to have launched at the end of 4Q11.

Service fees start at $60 per month and come with a 10GB data cap.  Verizon is expected to offer additional plans, such as 20GB of data for $90/month and 30GB of data for $120/month.  It will charge $10 per GB of data overage on any of the plans.

In addition to the monthly cost, the service requires the installation of a cylindrical antenna, often referred to as the Cantenna as well as a broadband router. The broadband router can connect up to four wired and at least 20 wireless devices inside the home using Wi-Fi.

The  LTE Cantenna is a fixed LTE antenna that would attach to the outside of the house and transmit the signal to a broadband router inside the home.  The LTE Cantenna (not a Verizon product name, but a generic term for this type of device) is about the size of  a 5-gallon bucket.  The cost of the hardware is $200, but Verizon, through it partnership with Asurion, will install it for free.

Asurion is an interesting choice, considering its primary activity is insuring wireless handsets.

Verizon had trialed this device with DIRECTV back in 2010, before it decided to focus on its partnership with Comcast.  Regardless, Verizon “found it to be extremely acceptable by the consumer”.

Verizon Wireless, will likely offer this as a bundled two-play wireless product via its own retail stores as well as through its affiliate network. 

The service is expected to offer speeds of 5 to 12 Mbps for downloads, and 2 to 5 Mbps for uploads – significantly faster than most rural broadband offerings – especially for upstream.  In addition, due to the lower density of subscribers, it is very possible for them to experience even significantly faster speeds – as much as  70 Mbps for downloads.

Obviously there are concerns about the data caps – which do not apply to any other fixed broadband service offered by Verizon.  The 10Gbps limit will definitely hamper services such as Netflix or any type of streaming video service – allowing about 10 hours of HD quality video per month.  But this also provides some opportunities for Verizon bundle this with its recently announced streaming services (via the RedBox JV).

So how does this compare to other services such as Satellite?  ViaSat’s Exede service offers a package with similar speeds (12Mbps/3Mbps) for $49.99/month with 7.5GB data, $79.99/month with 15GB data nd $129.99/month with 25GB data.

The service will initially launch in Birmingham, AL; Dallas, TX; and Nashville, TN and will likely be offered on a nationwide basis by the end of 2012.  

Despite the criticism that these market are hardly considered rural – it should be noted that availability of either DSL or cable-based broadband remains below 90% in each of these markets – according to the latest National Broadband Map. 

Similar to Clearwire’s service – this is strictly a fixed broadband service – a consumer would need to have a mobile broadband package for mobility outside the home.

broadbandtrends has been commenting for some time that 2012 will be a pivotal year for fixed broadband operators – and this will certainly put some pressure on rural operators that have not chosen to make an investment in fiber.  Is it a DSL killer as some suggest?  In some markets, perhaps.  But bandwidth caps and high prices will make this unattractive to a large number of potential customers. 

Nonetheless, rural operators should look at this as an opportunity to up their game – either through network upgrades to through better quality of service and experience.

We will closely monitor the success (or failure) of this service offering, particularly how it chooses to bundle the packages – for many customers – they will simply take a mobile broadband plan that offers a personal hot spot rather than buy two separate plans.

We will update as additional information becomes available.

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