Verizon Ditches DirecTV LTE Plans for Cable
Verizon Communications Inc. (NYSE: VZ) is abandoning its plans to test out an Long Term Evolution (LTE)-powered Internet and TV bundle with DirecTV Group Inc. (NYSE: DTV) following its new partnership with the cable MSOs of SpectrumCo. (See MSOs Sell AWS Spectrum to Verizon for $3.6B .)
Verizon CEO Lowell McAdam reportedly revealed that the company would cease a trial started about a year ago in Pennsylvania during a reporter scrum that followed his remarks at the UBS AG conference in New York on Wednesday. "One of our hallmarks is focus, and we're focused on getting Comcast up and running, and I can't do both, so we made our choice," Verizon CEO Lowell McAdam said, according to a report in Communications Daily.
SNL Kagan analyst Deborah Yao corroborated as much in a tweet sent when McAdam was talking to the press. "Verizon CEO Lowell McAdam to reporters: Will not go ahead with DirecTV LTE trials, will go with Comcast instead. 'We can't do both,'" she wrote.
The partnership between the MSO and satellite provider was just in its pilot stages, but Multichannel News reported last December that the two had completed technology tests, market research and user trials, and saw opportunity in working together.
Verizon also resells DirecTV's satellite video service in markets where it doesn't offer FiOS TV.
Why this matters
Verizon quitting its LTE gig with DirecTV is the first of widely expected fallout from its new partnership with Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks . Even if Verizon doesn't completely abandon DirecTV, it's clearly putting some items on the backburner in favor of its new cable allies.
Verizon plans to use its spectrum gains from SpectrumCo to bolster its LTE network and its multi-faceted sales and product integration relationship with the MSOs, which includes an optional MVNO component that can come into play in four years. This cable arrangement can help the telco go nationwide without a partner like DirecTV.
Read up on the implications of Verizon’s deal with cable below.
- Signs of the Video Armageddon
- Will Verizon Abandon DSL for Mobile Broadband?
- MSO Deal Not Verizon's Spectrum 'End Game'
- Charter Sizes Up Verizon Wireless Opportunity
- Verizon Wireless: Cable’s New BFF
— Sarah Reedy, Senior Reporter, Light Reading Mobile