Verizon Views 5G as Broadband Bonanza

More than ever, residential broadband is all about adding more fiber lines for Verizon, no matter whether it's for Fios or fixed 5G wireless service.

Verizon Communications Inc. (NYSE: VZ) executives made that point repeatedly Tuesday morning during the company's second-quarter earnings call. With fiber now deployed in more than 50 markets across the US, they aim to use this growing network to offer broadband service over both their existing Fios platform and the planned 5G-powered fixed wireless service.

In particular, Verizon officials believe that 5G technology will boost their residential broadband business substantially. They are now planning to launch 5G service commercially in four markets later this year, including Sacramento, Los Angeles and, in their latest designation, Houston. And all four markets will see gigabit-enabled 5G fixed wireless service for broadband users. (See Verizon Reveals Third 5G City, as Revenue Climbs 5.4% in Q2.)

"5G will give us the opportunity to be a much larger broadband provider," said incoming Verizon CEO Hans Vestberg, the company's current CTO who will be taking over for outgoing CEO Lowell McAdam on Aug. 1. Without giving out any numbers, he indicated that the telco would be extending fiber to and rolling out 5G fixed-wireless service in many more markets next year.

With the pending 5G launches on the horizon, Verizon is still relying on its Fios wireline platform to stoke broadband growth for now. Along those lines, Big Red netted 43,000 Fios Internet subscribers in the second quarter, down slightly from 49,000 a year ago but still a respectable gain. As a result, Verizon ended June with nearly 6 million data customers, up 222,000 from a year ago.

All told, Verizon now has a bit less than 7 million broadband customers, down about 32,000 from a year ago as it continues to bleed copper-based DSL subs. The company shed another 53,000 DSL customers in the spring quarter, putting its total DSL sub base slightly below 1 million. Verizon remains the fourth-largest broadband provider in the US, behind Comcast, Charter and AT&T.

On the video end of the business, Verizon continued to lose Fios subscribers because of continued cord-cutting by consumers. The company reported shedding 37,000 Fios Video subs in the second quarter, a deterioration from the 15,000 video subs it lost in the year-ago period. That leaves Verizon with a bit under 4.6 million video customers, down 106,000 from a year ago.

Also on the video front, Verizon recorded a pre-tax charge of $658 million, largely due to the shuttering of its Go90 mobile video service this month. In late June, Verizon announced that it would shut down Go90 after the nearly three-year-old service never really caught on with its mix of short-form original videos, live programming and licensed content. Go90’s operations are now being combined with Oath, the digital media service formed from the combination of AOL and Yahoo. (See Verizon's Go90 Shakes Hands With Eternity.)

— Alan Breznick, Cable/Video Practice Leader, Light Reading