Verizon has introduced its FiOS Instant Internet 750 Mbps symmetrical speed tier, a move that will likely prompt questions of when the telco will finally offer a 1 Gbps service to match cable competitor Comcast.
Beginning on Jan. 14, the service provider will make the Instant Internet tier available to 7 million homes in its current FiOS FTTH footprint.
Specifically, Verizon’s symmetrical 750 Mbps symmetrical speed tiers will be available to homes and businesses in greater New York City / northern New Jersey, Philadelphia and Richmond, with other cities to follow in 2017.
Following the initial launch in greater New York City / Northern New Jersey, Philadelphia and Richmond areas, Verizon said that FiOS Instant Internet will be available in portions of Boston and Norfolk later in the first quarter.
Similar to earlier offers, pricing is relatively competitive. Consumers can purchase a standalone service for $149.99 a month and $169.99 a month for a triple-play bundle with TV and landline phone voice service.
However, Verizon’s prices are higher than the new 1 Gbps offers from competitive cable operator RCN and Comcast in Philadelphia and New York City, for example.
RCN priced its 1 Gbps service at $70 a month in Philadelphia, while Comcast has priced its gigabit internet product at $140 a month with an additional $10-a-month modem rental. The cable MSO is also trialing a $70 a month service that requires a three-year contract.
Is there a Gig future?
One of the remaining questions for Verizon’s FiOS fiber to the premises (FTTP) evolution is: Will the service provider offer a 1 Gbps service?
A slight indication of Verizon’s FiOS future came on Wednesday when the service provider announced that it completed an interoperability trial of NG-PON2 with a number of equipment and silicon providers, including Adtran, Broadcom, Ericsson/Calix and Cortina Access, at its Verizon Labs location in Waltham, Massachusetts.
By implementing NG-PON2 technology into its FTTP network, Verizon will be able to support up to 40 Gbps of total capacity and symmetrical 10 Gbps speeds for each customer on a single fiber. However, the likely initial customer target for the NG-PON2 deployment will be businesses.
While Verizon won’t announce its earnings until Jan. 24, the service provider continues to see growing demand for FiOS internet services.
Following a decline due to a wireline labor strike, Verizon rallied back in the third quarter when it added a total net of 90,000 FiOS internet connections. Net broadband subscribers rose by 24,000 in the quarter.
The new 750 Mbps tier may not appeal to every consumer and business, but the service provider continues to see adoption of higher speed FiOS growing. Verizon noted during its third quarter call that 16% of the company’s FiOS internet base opted to purchase 100 Mbps or higher, compared with 11% in second-quarter 2016.
That is up from the previous 50 Mbps sweet spot Verizon has seen in previous years and indicates that consumers desire higher speeds to support content consumption on their devices in their homes.
According to NPD Group’s Connected Home Report, the average American home had seven or eight connected devices in 2016, up 64% over 2015. Verizon has positioned FiOS Instant Internet as a solution it says can handle today’s technologies with an eye toward "future proofing" for upcoming service demands.
FiOS envy remains
Despite the new speed tiers and its commitment to build out FiOS in parts of Boston, Verizon still faces calls from various state leaders who want the telco to bring the FTTH service to their residential and business customers. These leaders argue that the introduction of FiOS would provide consumers and businesses with not only higher speeds, but a new competitive choice.
A number of states have called out Verizon on refusing to expand FiOS at a time when the service provider is focusing more of its efforts on wireless and content with its pending acquisitions of AOL and Yahoo.
In 2015, two mayors from Massachusetts sent a letter to Verizon pleading with the telco to build out FiOS in their towns and cities. Additionally, 13 other East Coast cities sent a similar letter to Verizon asking the telco to expand its FiOS FTTH network into more areas that have limited access to high-speed services.
As Verizon considers where to go next with its fiber to serve small to medium business (SMB) customers it has lost to cable in its copper-based DSL markets, the company said it would like to establish relationships with cities similar to its public-private partnership in Boston. Verizon established an agreement with the city via a $300 million, six-year investment plan that will replace the city's aging copper network infrastructure with fiber.
While not indicating any specific wide-reaching plans to expand FiOS, Verizon’s CEO Lowell McAdam told investors in December that the model it used in Boston to effectively multitask its fiber network to support residential services, business, and its current 4G and upcoming 5G networks could be repeated in other cities.
“There are a lot of cities [that] we are having similar conversations with right now and I think there’s a little less of a war on business mentality from politicians than there was a year ago,” McAdam said.