Verizon Bundles Amazon Prime to Promote 1-Gig Fios

Nov 6, 2018

Kelly Potter

Kelly Potter

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Verizon looks to move the needle and step up their game for the relatively new 1-Gig Fios Internet service. Verizon is going to bundle in a year of Amazon Prime for new customers looking to add the internet service this holiday season.

In addition to free shipping perks, Amazon Prime also includes access to a large video streaming library of Amazon originals, licensed movies, TV shows, and Thursday night NFL games at a price of $119/year.

As for the deal, “Verizon Communications Inc. 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,” according to LightReading

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.

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.

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.”

Verizon EVP and CFO Matt Ellis 

Verizon’s in-home broadband 5G service became available October 1, 2018 in select cities, including parts of Houston, Indianapolis, Los Angeles, and Sacramento for customers. “Verizon’s ‘5G Home’ offers downloads of around 300Mbit/s with peak speeds of nearly a gigabit,” Verizon comments.

Much like FiOS, Verizon envisions this being used to support broadband, video streaming, and multiple device connections in the home. 

Early users in the four markets can sign up for ‘5G Home’ service for free for the first three months. The price starts at $50/month for existing Verizon Wireless customers, and $70/month for new customers. 

Currently, Verizon’s price points are in line with cable competitors such as Comcast who currently charges “$60/month for 250 mbps stand-alone broadband and Charter who charges $67/month for 400 mbps service, plus taxes and fees.”

The downside for Verizon could be the performance scale once consumers launch with the new product. Comcast and Charter have a leg up being nation-wide companies offering several services in bundled packages. 

It will come down to will the customer switch their service for a new feature that is still working out its kinks, additional add-on fees after the initial 3-months, and take a risk on their current service for something new? 

Kelly Potter

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