Verizon Fixed Wireless Customers Consume More Data Than Fios Customers

“Our fixed wireless users on 5G are using more data than our Fios customers,” says Hans Vestberg, Verizon CEO. On the face of it, that seems hard to understand. Most fixed wireless connections are likely to run slower than Verizon’s fiber to home connections, partly because some of those connections rely on slower 4G, partly because of free space interference, partly because Verizon has only begun deploying some of its millimeter wave capacity. 

At this point we can only speculate about what drives that behavior, but early adopter behavior might be part of the answer. Verizon seems to be deploying its 5G fixed wireless out of region, so Verizon is competing for customers who do not live in the Verizon fixed network footprint. 

Perhaps what we are seeing is demand from lead users who are heavy bandwidth consumers, as often is the case. It is conceivable that the early users of Verizon 5G fixed wireless are heavy users who have not had a viable high-capacity fixed network alternative in the past, or not at Verizon’s price points. 

In any event, it seems unlikely to remain the case that 5G fixed wireless customers show the pattern of consuming more data than do Fios customers. Over time, the base of early adopters and heavy users will be followed by larger numbers of customers with a more typical consumption profile. 

Vestberg says he is not yet sure how big a percentage of fixed network net broadband additions fixed wireless will be. Some would note that the U.S. fixed network broadband market adds about three million net new accounts per year. 

Some argue that telcos will start to boost their rate of net additions dramatically--indeed must do so--if they are to eventually take as much as half the installed base of broadband accounts. Right now cable operators have 65 percent to 70 percent of the installed base. So if telcos eventually are to get half the installed base, their market share has to be more than 50 percent per year. 

If telcos and cable split the net new additions 50-50, the installed base share never changes. 

For Verizon, the bulk of net new additions for fixed broadband are going to come out of region, simply because Verizon’s traditional fixed network footprint is so limited. And most of those efforts will rely on fixed wireless. 

In the third quarter of 2021, for example, Verizon had 74,000 net fixed network account additions. In that quarter Verizon gained 55,000 fixed wireless accounts. So you see the pattern already. 

If and when Verizon begins to grow its fixed network broadband share, it will be on the strength of its fixed wireless efforts. That’s among the implications of Verizon saying it is becoming a “national broadband” supplier. 

Separately, T-Mobile also will be aggressive in the fixed wireless market. So it is likely that fixed wireless net adds will be led by Verizon and T-Mobile. AT&T remains more focused on boosting its fiber-to-home profile.