Verizon's Ellis: Despite strong demand, no plans to expand 1-Gig service

Verizon sign
Verizon CFO Matt Ellis says there has been strong demand for the company's gigabit service during the coronavirus pandemic. (FierceWireless)

Despite subscribers' response to Verizon's 1-Gigabit service, the telco has no plans for offering the faster speed out of the current footprint.

Speaking at the Oppenheimer Technology, Internet & Communications Conference earlier this week, Verizon CFO Matt Ellis said his company was "selling a lot of gigabit speed," due in part to the demand for video streaming and other services during the coronavirus pandemic.

"If you think about Fios footprint in the essentially the D.C. to Boston corridor, we're not expanding outside of that geography, but we are seeing strong demand for that product," Ellis said, who was taking part in the conference virtually. "I'm sitting on our Fios gigabit speed right now, and I've had no trouble over these past few months with my kids on video at the same time and everything else. I think a lot of people have seen the value of that in this environment."

Sponsored by Anritsu Company

Free eBook: Efficient Testing Will Contribute to Long-Term Success in the 5G Marketplace

As companies worldwide race to launch 5G successfully and avoid post-deployment setbacks, we see a massive rise in the demand for 5G test and measurement equipment. We will discuss how efficient testing can contribute to long term success in 5G marketplace.

Verizon added 10,000 residential Fios broadband subscribers in its recent second quarter, but that was off of the 59,000 Fios broadband connections in the first quarter. Ellis said Verizon had a backlog of broadband installs during the initial stages of the coronavirus pandemic due to technicians' inability to enter customers' homes for installs.

In April, Verizon was able to somewhat mitigate the impact of not being able to enter customers' homes with its "Fios in a box," which enables customers to self-install their services.

RELATED: Despite Covid-19, Verizon adds 10,000 residential broadband customers in Q2

"So we've got strong momentum in that business," Ellis said. "We saw that in our results in June. We came into the third quarter still with a bit of a backlog to work through from what we had. So good momentum in that business with very strong demand for Fios because of the high-quality nature of the broadband service there, and our customers are valuing that today more than ever.

"And then you layer on the fact there's been even more cord-cutting taking place. So people are doing more of their video entertainment OTT as well. I expect to see strong demand for Fios going forward here. And certainly, the gigabit offering, within the overall Fios offering, has become very much the lead offer out there."

RELATED: Verizon targets cable bundles with 'Mix & Match' TV and broadband services

While initially targeting affluent areas on the East Coast, Verizon pulled back on its Fios expansion into new areas several years go. Verizon's 1-Gig service, which actually has speeds of 940/880 Mbps, competes with cable operator's 1-Gig offerings, including Comcast and Altice. In order to better compete against cable operators, Verizon announced its "Mix & Match on Fios" pricing in January that allowed customers to pick customized options with lower price points.

For broadband, Mix & Match has three options: 100 Mbps, which costs $39.99 per month, 300 Mbps ($59.99) and a gigabit connection ($79.99.) As an added perk, Verizon offered new Fios broadband customers one free year of Disney+.

During the conference, Ellis was asked if Verizon would be coming out with new bundles going forward. Ellis said he wouldn't pre-announce any planned changes to Verizon's bundles, or whether Verizon will start charging customers for Disney+.

"We have, around this time of year, kind of refreshed our pricing plans, not just from a price standpoint but the makeup of and the content of them," Ellis said. "And we do that in the run-up to some of the iconic product launches and heading into the holiday and so on. So it's a good time for us to do that."

"What you've seen over the past few years with that is when we shifted to unlimited we changed the currency. The currency used to be how many bits of data did you have in the bucket? You buy a small bucket, medium bucket, large, whatever. When you move to unlimited, you completely change that."

Ellis said Mix & Match allows Verizon's customers to not just pick something for the whole family, but also pick different plans for each member of the family within an overarching family plan.

"That's been very successful for us," he said. "So obviously, last year, we brought Disney+ into our unlimited plans. That was very successful for everyone; for us, for Disney, for our customers.  I'm fairly sure Ronan (Dunne) and his team have got some things they're planning on here, but I'll let them announce what they're doing at the right time."

Suggested Articles

Now that Nvidia has pivoted into the networking and mobile chip market with its acquisitions, large networking incumbents should be very nervous.

Windstream Holdings announced on Monday that it's now free from the shackles of Chapter 11 bankruptcy.

VMware's VeloCloud SD-WAN has found a home in Equinix's data centers, which means VMware can now offer it as a virtual network function (VNF.)