A combination of sparse coverage and low service penetration rates early on in Sacramento suggest that Verizon's relatively new 5G Home broadband service will have a tough time achieving an attractive return on capital, MoffettNathanson found in its study of the service's rollout.
MoffettNathanson's study, based on a sample of nearly 45,000 Sacramento addresses (out of about 70,000), concluded that Verizon faces a "steep climb" in its efforts to scale up the deployment and economics of 5G Home, a service that today is using millimeter wave spectrum to deliver typical speeds of 300 Mbit/s at a price starting at $50 per month.
Just 6% of residential addresses in the parts of Sacramento covered by the study are currently deemed "eligible" for 5G Home. Roughly six months after 5G Home was launched, Verizon has signed up less than 3% of the eligible single-family homes in the sample region, the study found, noting that overall penetration would likely be higher if customers in multiple-dwelling units were included.
"[O]ur findings in Sacramento -- limited coverage, low penetration -- preliminary though they may be, suggest that earning an attractive return will be challenging, at best," Craig Moffett, analyst with MoffettNathanson, wrote in the research firm's analysis of Verizon's 5G Home rollout there.
The core questions about 5G Home, the reports holds, is not the technology or the physics of millimeter wave spectrum, but the economics and whether Verizon can secure a "passable return" on capital.
And even if fixed wireless broadband is less expensive than FTTP to construct, the total cost per connected home could actually be more if the penetration rate for the new wireless service is not comparably high. The low penetration rate Verizon has seen thus far for 5G Home in Sacramento isn't nearly enough to achieve economics that are better than a typical FTTP network example, the report found.
Verizon is also offering 5G Home and testing how it operates in different topologies and foliage levels in three other markets -- Houston, Indianapolis, and Los Angeles -- so it's possible that Verizon could be getting better (or worse) results in those markets.
The ongoing debate around GPON vs EPON can get as heated as discussions around politics and religion, but both technologies offer some advantages over the other depending on the needs your network is servicing.
In this webinar, we will focus on the facts around the GPON vs EPON debate and how that technological decision is almost always made based on factors outside the technology itself.
In this insightful Light Reading radio show, Kurt Raaflaub, Head of Strategic Solutions Marketing, will outline the key service provider challenges, deployment considerations, next-gen Gigabit technologies, and service models to win market share in the rapidly growing MDU market.