Verizon's Ritter: Our 300 Mbps FiOS tier is about building a foundation for new services

DALLAS--Verizon (NYSE: VZ) got the broadband market's attention recently with its plan to offer a 300 Mbps tier for its FiOS Fiber to the Premises (FTTP) service, a move the company says will create a foundation to support multiple devices and higher bandwidth applications in the home.

Speaking in the closing keynote at Parks Associates' CONNECTIONS at TIA 2012, Verizon CMO for Consumer & Mass Business Markets, Mike Ritter, outlined the vision of what its higher FiOS speed tiers will enable.

With the new speeds, the focus is on targeting users who are more interested in downloading using bandwidth-hungry applications such as online video and gaming via multiple devices in the home.

"We're making, I think, a bold new move to respond to this trend of the consumption of devices with a whole new portfolio of broadband speeds," he said. "We're going to double the speeds of all of our top tiers within our bundles, and for the first time we're offering 300 Mbps to the consumer at a very reasonable price that will more than double anything that's in the marketplace today."

Set to be launched later this month, the one remaining mystery about the new speed tiers, of course, is the pricing.

A recent report in The Verge suggests that the telco will charge $65 monthly for its entry-level 15 Mbps FiOS Internet offering, while the 300 Mbps tier will cost $205.

Today, the service provider offers consumers to build their own FiOS triple-play bundles online with three primary speed tiers: 15/5 Mbps, 25/25 Mbps, and 50/20 Mbps with traditional voice calling and various packages of video channels. Verizon also offers a 150/35 Mbps option, which costs $194.99 a month (with a voice line) and $199.99 a month (without voice service).  

Stopping short of confirming bundle pricing, Ritter did say they will offer various options for consumers to purchase the bandwidth tier they want on their respective triple play bundle. 

"The first thing people say is you're going to charge a lot more, but what we're going to do when we bring this out to market is we're going to give the consumer the ability to mix and match their bundles," he said. "That high end user may not be that user consumes all of that linear content on the TV, but they could be someone that's consuming some of that from over the top so we'll allow them to control their budget."

But the new speed tier story is not just about OTT video.

The service provider is seeing strong demand from cloud-based gaming providers that want to deliver a better user experience by reducing network latency. A number of unnamed gaming company partners told the service provider that it wants to build applications that would match Verizon's speeds, Ritter said.

"The interesting thing is a number of major providers in the live gaming industry have come back to us as we think about more of our stuff in the cloud, if we could figure out how to take advantage of these higher speeds we make a unique experience that's never been seen in gaming before," he said.

Ritter admitted in an interview with FierceTelecom that while he does not expect a land rush of users signing up for 300 Mbps right away, Verizon wants to have the foundation in place to give users that option when they eventually need it.

"By itself are there applications that are going to take 300 Mbps?," he said. "Well, not at the beginning, but if I have 20 devices, there are projections say will that amount will double in the next three or four years."

Special Report: In detail: Unraveling the triple play bundle

Related articles:
Report: Verizon to charge $65 monthly for 15 Mbps FiOS Internet; 300 Mbps will cost $205
Verizon unveils FiOS 300 Mbps data speed tier, doubles existing tiers
Verizon to double speed of premium FiOS Internet tiers
Shammo: Verizon eyes more FiOS rate hikes; will 'rebundle' packages

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