Is Verizon's Home Phone Connect a way to poach its divested wireline customers?

Sean Buckley, FierceTelecomVerizon (NYSE: VZ) may have hung up its landline voice customer base in 14 states when it sold those lines off to Frontier, but that does not mean that it's not going to compete against the independent ILEC for customers in Frontier's wireline stomping grounds.

No, instead they're going to compete against Frontier Communications (NYSE: FTR) with--you guessed it--a wireless-based voice service. Verizon Wireless will leverage their existing CDMA-based wireless network to offer a landline alternative in select parts of Connecticut and right in Frontier's existing home base of Rochester, N.Y.

Dubbed "Home Phone Connect," the service is based on a small dual band 800/1900 MHz CDMA device that the user plugs into their traditional electric outlet with two RJ-11 phone jacks and battery backup that provides two days of standby time and three hours of talk time.

Even though the service is wireless, Home Phone Connect looks and smells like your typical wireline-based POTS service. Verizon Home Phone ConnectNot only will the user be greeted with that usual dial tone sound, but they'll be able to get access to the typical POTS features, including caller ID, call forwarding, call waiting and holding, three-way calling, and E911.

"Home Phone Connect can go right on the kitchen counter. People still enjoy having a community phone in the house that any family member picks up," said Michael Murphy, Verizon's public relations manager for the New England Region, adding: "I don't answer my wife's cell phone."

The only obvious difference here is that the service is traversing the wireless network. As long as the calls are clear and aren't dropped, it is unlikely that consumers will notice the difference.

Current Family Share plan users can get the service for free, but will then have to pay $9.99 a month and $19.99 for all-you-can-eat calling. 

While the current version of Home Phone Connect supports CDMA, it's not completely inconceivable that Verizon could put out an LTE-based offering as well. As reported by my colleague Phil Goldstein, Associate Editor of FierceWireless, Verizon Wireless will commercially launch its LTE service in 38 markets and at more than 60 airports this week.

What's more, the pilot debut of Home Phone Connect comes not long after Verizon announced that West Virginia would be one of the markets where it would debut its broadband LTE service.

For anyone that's been following the Frontier/Verizon saga, West Virginia is relevant in that it's not only Frontier's largest market, but one in which the service provider is going to have to spend a lot of money to upgrade a POTS network that was largely ignored by Verizon. The carrier turned its nose up at its West Virginia network in favor of building out its 3G wireless network and its Fiber to the Premises-based FiOS network in larger markets like New York City.

It's not clear if Verizon's strategy is to market Home Phone Connect, or even its LTE wireless broadband offerings, as a competing service to Frontier, but it sure looks like they could use it to attack its former wireline markets with the newer mobile service.   

Regardless of how Verizon initially markets the Home Phone Connect service, the challenges for Frontier are twofold. In addition to upgrading and integrating the lines and systems in the 14 states it acquired from Verizon into fit into its fold, Frontier will have to create a compelling broadband/POTS bundle that will encourage existing POTS users from churning over to the hipper wireless-based service.

Yes, it's true there's a growing amount of users that are ditching their traditional phone lines for wireless, but it's hard not to see the overall irony in Verizon's strategy to poach subscribers away from the very company that bought its unwanted lines and in Frontier's existing markets.--Sean

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