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The last days of Vivint Internet

Vivint Internet, a fixed wireless Internet provider across parts of Texas and Utah, announced on March 3, 2020, it would discontinue services to its roughly 8,500 customers.

Roughly two weeks later, the COVID-19 pandemic began forcing lockdowns across much of the US, a development that suddenly positioned Internet connections like those sold by Vivint as a critical lifeline for many Americans' work, school and social lives.

"Vivint Wireless regretfully announced the wind-down of its business due to the current environment no longer being economically viable for it to operate," the company said in a statement to Light Reading.

"For several years leading up to the company's orderly wind-down, Vivint Wireless had been working on new technology, growing its business model, and seeking to attract further investment to scale. Unfortunately, the environment at the time made it no longer economically viable for the company to operate."

Vivint's shutdown stemmed from technological shortcomings, fierce competition from wired rivals, and private equity executives unwilling to dump more money into a shaky investment.

This is the story of the company's collapse, based on interviews with several executives familiar with the company's operations who asked to remain anonymous.

If at first you don't succeed...

Vivint Internet traced its ancestry back to security alarm installation company APX Alarm Security Solutions, founded in Provo, Utah, in 1999.

After nabbing some funds from Goldman Sachs, Blackstone Group and others, the company rebranded as Vivint in 2011 and then quickly expanded into markets including smart home, solar energy and fixed wireless (partly through the acquisition of Wi-Fi networking company Smartrove in 2013).

After a few successful market tests, Vivint Internet made a splash in 2015 with plans to expand to roughly a dozen major markets within a year by running its mesh network operations in the 28GHz and 5GHz spectrum bands.

But the effort quickly fell apart. The 5GHz band was heavily used by a variety of other unlicensed operations, including Wi-Fi networks, and simply couldn't support the kinds of speeds Vivint needed to provide. Vivint's parent company wrote off more than $50 million in expenses related to the failure by the end of 2015.

...Try, try again

However, a handful of executives stuck around and worked to refresh the Vivint Internet network model by running operations in the 60GHz and 3.5GHz CBRS spectrum bands, which could support faster speeds and were far less crowded than the 5GHz band.

Initial results were encouraging. Across a handful of test markets, Vivint Internet was able to steal up to 20% share from behemoths like Comcast. And customers were happy with the service; the number of Vivint Internet subscribers who canceled was half that of Vivint's previous attempt in 2015.

But it still wasn't enough.

Vivint's parent company spun off the business in the summer of 2019, and, after failing to obtain more financing, the company's leadership decided to close Vivint Internet's doors shortly thereafter.

"It was a painful decision," said one executive involved in the decision.

One bright spot: Vivint's private equity backer Blackstone agreed to finance Vivint Internet's operations for an extra month during the spring of 2020 "given the exceptional circumstances at the time and increased need for connectivity during the COVID-19 pandemic," according to the company.

Too much competition, not enough capital

According to those involved in Vivint's efforts, the company faced two big challenges: financing and opposition from incumbent rivals.

Investors in general have shied away from fixed wireless companies, and Vivint Internet was no exception. The problems are many: Fixed wireless technology can often be affected by things like trees and rain. Perhaps more importantly, fixed wireless providers often compete against wired options ranging from DSL to fiber that can be faster, more reliable and cheaper.

But perhaps the most intractable problem was the fact that incumbent providers like Comcast and CenturyLink were often quick to respond to challenges from Vivint. For example, if Vivint began offering services at $70 per month, its competitors would quickly reduce their fees to $60 per month.

One executive said the company's rivals got wind that Vivint Internet was preparing to launch in their market, and quickly began signing their customers to two-year service contracts with the promise of lower prices.

The move was designed to prevent those customers from being able to switch to Vivint when it launched service, on the hope that it wouldn't last long enough to pick up those customers when their two-year contracts expired.

Moving on

Regardless, some of the top executives who shepherded Vivint through its fixed wireless adventures haven't given up on the space. For example, Vivint Internet's CEO in 2019, Mike Hart, acquired the company's technology platform and is now selling it to other network operators "as a service" through his new Aervivo startup.

He said the company can offer everything from billing to network hardware, and is targeting telecom, fixed wireless and real estate companies with its offering.

And Kevin Ross and Luke Langford, who worked at Vivint Internet during its expansion efforts in 2015, are now heading up fixed wireless Internet startup WeLink. The company recently announced a $185 million investment that it plans to use to eventually expand its service into ten US cities. The company is running its mesh network operations in the 60GHz band.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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