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Will Verizon Abandon DSL for Mobile Broadband?

With an MSO spectrum deal in tow, Verizon could abandon DSL entirely in favor of broadband wireless services

Sarah Thomas

December 7, 2011

3 Min Read
Will Verizon Abandon DSL for Mobile Broadband?

Verizon Wireless 's deal to acquire Advanced Wireless Services (AWS) spectrum from cable's SpectrumCo camp may be the final nail in the coffin of DSL, as the operator could end up replacing the fixed service with bundled broadband wireless access.

Verizon Wireless parent company Verizon Communications Inc. (NYSE: VZ) hasn't specifically outlined plans for the fixed-line service, but the carrier has been deemphasizing it for years now. With the extra capacity on the way for Long Term Evolution (LTE) from Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks , as well as a complementary services relationship with those MSOs, Verizon may have little need left for the wireline tech now. (See MSOs Sell AWS Spectrum to Verizon for $3.6B , MSO Deal Not Verizon's Spectrum 'End Game' , Charter Sizes Up Verizon Wireless Opportunity and Verizon Wireless: Cable’s New BFF.)

"If you read into the co-marketing, resale and technology integration terms of the cable–Verizon Wireless hook-up, you could surmise that Verizon intends to package mobile broadband services with cable's wireline broadband and video services as a bundle," Telecompetitor analyst and Light Reading contributor Bernie Arnason writes on his blog.

In territories where Verizon doesn't offer its fiber-based FiOS services, and that's most of them today, it could instead offer a new type of cable-mobile broadband bundle, washing its hands entirely of DSL, he adds.

Arnason believes that Verizon has around 40 million to 60 million customers, as well as portions of its retail footprint, that are not served by cable or FiOS, making them potential targets for this new bundle.

This would spell trouble for the DSL offers from competitors like AT&T Inc. (NYSE: T), CenturyLink Inc. (NYSE: CTL) and Frontier Communications Corp. (NYSE: FTR). Heavy Reading analyst Berge Ayvazian believes, however, that Verizon will only use its coveted Long Term Evolution (LTE) spectrum to deliver basic broadband in rural areas where it's the only option to reach them.

End of the road for FiOS
While DSL's long-term future with Verizon appears to be in some doubt, the company is a bit more sure about how much more certain about its future buildout of FiOS. Verizon CEO Lowell McAdam told investors at the UBS AG conference Wednesday that "for now the bottom line is we are going to build out what we said and not any more."

But he did leave some wiggle room, noting that Verizon could "reevaluate" that later if it can get more favorable economics by getting more efficient on the ONTs [optical network terminals] and with the gear that that's required inside FiOS households.

McAdam wouldn't commit to a completion date for the FiOS buildout, only saying it should reach the end in a couple of years, and perhaps four at the most. The carrier is at about 15.8 million homes passed now, and likely to reach 17 million to 18 million when it's done.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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