Verizon will try to move the needle for its relatively new 1-Gig Fios Internet service this holiday season by bundling in a year of Amazon Prime to new customers.
In addition to free shipping perks, Amazon Prime, which sells for $119 a year, also includes a large video streaming library of Amazon originals, licensed movies and TV shows and Thursday night NFL games.
As for the deal, Verizon Communications Inc. (NYSE: VZ) will give a free year of Amazon Prime to new 1-Gig subs (or an additional second year of the service if they already have Amazon Prime). Verizon will also toss in an Amazon Echo device to Fios subs who bundle 1 Gig with TV or phone service and make a two-year commitment.
Bundling options aside, the promo's true center is Fios Gigabit Connection, a service that Verizon launched in April 2017, and, despite the Gig-focused branding, actually tops out at 940 Mbit/s down and 880 Mbit/s upstream.
The Amazon Prime combo is another indicator that Verizon is turning to OTT video options to flesh out its broadband connectivity business. In another recent example, Verizon is bundling in three free months of YouTube TV service to customers who sign on for its new 5G Home fixed wireless Internet service. (See Verizon's Home-Grown 5G Arrives Today.)
The promo will also bring more attention to Verizon's gigabit offering as cable operators expand their deployments of DOCSIS 3.1 and bring to bear their own 1-Gig service (in the downstream, anyway). (See Charter Nears Gigabit Finish Line and Comcast Wraps Up DOCSIS 3.1 Rollout .)
And the holiday offer also fixates on the good part of Fios's story -- broadband. In Q3, Verizon added 54,000 Fios Internet subs, extending its total to 6.01 million. Thanks in part to pay-TV cord-cutting, Verizon also shed 63,000 Fios Video customers, ending Q3 with 4.49 million.
Speaking on last week's earnings call, Verizon EVP and CFO Matt Ellis attributed the rise in Fios Internet to demand for "high-quality" connectivity as video continues to be hurt by a "secular trend" of cord-cutting and a segment of consumers who are just plain steering clear of pay-TV. He said Verizon has also seen a greater number of customers go with broadband-only plans.
"As we have said before, if you're going to rely on OTT for your video entertainment, you want to make sure you have got a great broadband experience," he said. "And whether that be Fios broadband or now for those customers who can get in-home broadband through 5G, we believe we have the best in-home experience out there for those customers who want to get their entertainment from an OTT fashion."
— Jeff Baumgartner, Senior Editor, Light Reading