Despite speculation to the contrary, don't expect to see Verizon launch a new full-fledged OTT video service until it starts rolling out residential 5G in a few select markets later this year.

Speaking on the company's first-quarter earnings call Tuesday morning, Verizon Communications Inc. (NYSE: VZ) EVP and CFO Matt Ellis said Verizon intends to have a new OTT video offering in place when it launches 5G service in three to five residential markets in the second half of the year. "We've gotten that underway," he told analysts on the call. "We continue to look at our OTT options." (See Verizon Preps Fixed 5G but Mobile Gigabit-Speed Downloads May Not Arrive Until 2019.)

But Ellis declined to say what type of OTT service Verizon is considering, beyond stating that it won't be "a me-too product." That presumably means that it will somehow be different than the half a dozen or so nationwide skinny-bundle services that are already operating in the US market, such as Sling TV, DirecTV Now, PlayStation Vue, Hulu Live and YouTube TV.

It's not surprising that Verizon is now treading very cautiously in the OTT space, given its previous stumbles in the next-gen video market. Earlier this year, for instance, it quietly pulled the plug on its much ballyhooed Fios IPTV platform after working for years to craft it. And its Go90 OTT service for mobile phones has never really taken off. (See Verizon's New Fios TV Is No More.)

Yet, due to this cautiousness, Verizon remains the lone major US pay-TV provider without a major offering in the rapidly emerging skinny-bundle space. Dish Network LLC (Nasdaq: DISH) and AT&T Inc. (NYSE: T) lead the market with their respective Sling TV and DirecTV Now services, whileComcast Corp. (Nasdaq: CMCSA, CMCSK) and Charter Communications Inc. now offer their own skinny-bundle versions within their respective footprints. And AT&T just announced plans late last week to roll out a new, sports-free streaming service, AT&T Watch, at the bargain-basement price of $15 per month.

Deciding how to tackle OTT becomes more pressing as Verizon, stung by cord-cutting like its pay-TV counterparts, continues to shed Fios video subscribers. For the fifth straight quarter, as well as the sixth time in eight quarters, the provider lost pay-TV customers in the first three months of the year, dropping 22,000 Fios video subs. As a result, the telco closed out March with slightly under 4.6 million video customers, down 184,000, or nearly 2%, from a year ago. (See Verizon: Video Down but Media Up.)

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Once again, the video sub losses came despite continuing gains by Verizon's companion Fios Internet service. It added 66,000 data subscribers in the first quarter, marking its seventh straight quarterly gain. Thanks to this latest increase, Verizon entered April with more than 5.9 million Fios Internet subs, up 228,000, or 4%, from a year earlier.

Verizon reported that Oath -- which combines the online assets of the former AOL and Yahoo digital businesses -- generated $1.9 billion in revenues in the first quarter, down about 13% from $2.2 billion in the fourth quarter of 2017. The company said the quarterly decline was expected, blaming it on "seasonally lower display advertising performance."

As company executives have done before, Ellis all but ruled out any moves by Verizon to buy a big content company, as Comcast did with NBC Universal several years ago and telco rival AT&T is fighting a legal battle with the government to do with Time Warner Inc. (NYSE: TWX) right now. Despite rumors swirling around the market, Ellis said Verizon has no big media deals in its sights.

— Alan Breznick, Cable/Video Practice Leader, Light Reading