Verizon's HomeFusion LTE service could be a financial win

Verizon's HomeFusion LTE service opens up new markets for the telecom giant and can deliver some nice financial gains.

Verizon's move to launch its HomeFusion Broadband Service, which brings LTE into homes as a wired replacement, creates a bevy of interesting possibilities.

CNET's Jessica Dolcourt noted that Verizon's LTE-powered service will launch nationwide on Thursday. The idea is simple: Use LTE to link up a bevy of home devices to the Internet. In the long run, Verizon's service could be a wired replacement.

Dolcourt wrote:

Verizon's HomeFusion LTE will zip into homes through professionally-installed antennae receivers affixed on the outside of the house (this will cost you $199.99), then transmit signal to a Wi-Fi router inside the house. Using Wi-Fi, customers can connect up to 20 devices. Customers should expect downlink speeds of between 5Mbps and 12Mbps and uplink speeds ranging from 2Mbps to 5Mbps.

The rates will range from $60 a month for 10GB of data to $120 a month for 30GB. Verizon sees HomeFusion as a residential broadband alternative.

The moving parts of Verizon's HomeFusion effort are worth noting. Consider:

  1. Verizon's service fills in gaps for its wired territories. In some cases, HomeFusion could compete with Verizon's own FiOS fiber optic service. Verizon, however, has weighed the cannibalization effects and sees a bigger payoff ahead.
  2. That payoff is likely an easier route to compete with cable rivals such as Comcast and Cablevision. Verizon's LTE service will be cheaper to install and put it squarely in markets it doesn't have now.
  3. Verizon's broadband strategy can reach into more locales and ultimately increase the revenue pie for the company.
  4. The telecom giant will also have better margins since hooking up an LTE receiver to the home is cheaper than running fiber optic cables.
  5. Verizon can use the HomeFusion service to differentiate itself from rival carriers and land more revenue producing customers.

Add it up and HomeFusion is an experiment worth taking. The risks to Verizon are minimal and the financial gains could be substantial.