Verizon Communications (NYSE:VZ) has been trying to replace its aging DSL service with its FiOS networks for years, and now its wireless unit is offering HomeFusion Broadband LTE service as an alternative to DSL both inside and outside of Verizon's landline footprint.
HomeFusion rolled out during March in a handful of markets and starting this week is being marketed in all of Verizon Wireless' 230 markets, which cover more than two-thirds of the U.S. population. During Verizon's first-quarter 2012 earnings call, Verizon CFO Fran Shammo called HomeFusion a "growth engine." He said the trial launch had been going well, with 10 million homes already launched.
Verizon Wireless, which is co-owned by Verizon Communications and Vodafone Group, is pushing HomeFusion Broadband as an alternative for residential broadband, particularly in areas with limited broadband choices. The service indirectly allows parent company Verizon to extend its brand and fixed broadband presence outside of its traditional DSL footprint.
Promising speeds of 5-12 Mbps downlink and 2-5 Mbps uplink, the fixed home service is priced in tiers starting at $60 per month for 10GB of data, $90 monthly access for 20 GB or $120 monthly access for 30 GB. Verizon charges $10 per month in 1 GB overage fees as well. That deal is a bargain compared to Verizon's mobile broadband service, which cost $30 per month for 2 GB, $50 for 5GB and $80 per month for 10 GB.
Verizon charges $200 for the required HomeFusion cylinder-shaped antenna--similar to a gray 1-gallon bucket--which must be attached to a customer's home, though professional installation by Asurion is free. The router is designed to connect up to four wired and at least 20 wireless devices inside the home using Wi-Fi.
Verizon Wireless' LTE marketing efforts are paying off. During its first- quarter earnings report, the company said it sold 2.9 million LTE devices in the quarter, up from 2.3 million in the fourth quarter, bringing its total number of LTE subscribers to 8 million, or approximately 9 percent of its postpaid base.
Parent company Verizon has seen its broadband average revenue per user (ARPU) increase as more customers have shifted to fiber from DSL. Strategy Analytics has said it expects Verizon's FiOS Broadband service to be taken by more than 5.6 million subscribers in 2012, and projected that the company will have nearly 5 million FiOS TV subscribers, representing a 5 percent share of the U.S. pay-TV market, by year's end.
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This article was updated on May 3, 2012, to correct the description of the HomeFusion antenna.