Verizon's Fixed 5G Not A Major Threat To Broadband: Analyst

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Verizon's 5G fixed wireless access service isn't a major threat to Internet providers offering traditional broadband solutions, Jonathan Chaplin of New Street Research wrote to investors on Tuesday, as reported by FierceCable. While the largest carrier in the United States repeatedly touted its plans for a fixed solution as the first step toward the evolution of wireless promised by 5G technologies that will also be able to compete with cable-based Internet, Mr. Chaplin estimates the best scenario the telecom giant can hope for is netting approximately seven percent of the broadband market, i.e. around eight million subscribers. The timetable for that achievement also isn't on Verizon's side, with the analyst claiming the company may take as much as 15 years to just start offering wireless broadband to 30 million households in the U.S.

The skepticism expressed by Mr. Chaplin in regards to Verizon's ability to offer a viable alternative to cable Internet providers isn't unprecedented and has already been observed in a number of statements from stateside ISPs like Comcast, all of whom are also testing the same technology. Besides reliability, ISPs remain uncertain about the economic viability of a fixed wireless solution as such offerings are likely to be significantly costlier than traditional broadband. New Street's analyst said Verizon may opt to invest as much as $35 billion in deploying a fixed wireless service going forward but is unlikely to reveal whether it intends to do so until at least early 2019. While Verizon is by far the biggest FWA advocate in the U.S. telecommunications industry, it's impossible for its financial commitments to the technology to yield a net profit over any period of time unless the company utilizes it for more than just trying to compete with traditional broadband, Mr. Chaplin believes, adding that the company may still drop fixed wireless in its entirety.

Following the same train of thought, should Verizon move forward with a major investment in the segment, it will likely do so to improve the capacity of its wireless network through densification and will only use fixed wireless broadband as a justification for such a move, according to the same industry watcher. Verizon will commercialize a 5G FWA service in partnership with Samsung in the second half of the year before it begins rolling out a truly wireless 5G network in early 2019.

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