Verizon could deliver a fixed wireless service comparable in speed and reliability to cable to 30 million homes, but the process could take 15 years, New Street Research analyst Jonathan Chaplin said in a note to investors today.
Further, Chaplin estimated that Verizon’s fixed wireless broadband (FWB) play might yield only around 8 million subscribers, or about 7% of the market.
“Our analysis suggests that the FWB threat to cable is relatively modest,” Chaplin wrote. “The opportunity in wireless for cable is much greater.”
Verizon, Chaplin estimates, could spend $35 billion in the deployment phase for FWB, “and there’s no way the project would ever generated positive net present value on the FWB opportunity alone.
“If Verizon pursues FWB, it will be because they need to densify their network to boost wireless network capacity,” the analyst added. “The FWB opportunity would be a way to rationalize an investment they have to make anyway.”
Chaplin also said it’s “far from certain that Verizon will commit the resources required to be successful in FWB; we won’t know for at least a year.”
Asked if he viewed fixed wireless as a threat at SCTE Cable-Tec Expo in October, Comcast Cable CEO Dave Watson responded, “We’re going to stay close to it. We’re testing both fixed and mobile aspects to it. The main question is, with this higher frequency range, can it reliably and economically delivery [a service on par] with fixed broadband? I don’t believe at this stage at all it’s a threat, at least to the fixed broadband side."