"Verizon's announcement this week about the company's commercial agreement with Eaton Fiber is the latest example of how important the "killer bundle" of mobile and internet service has become. Or, as Verizon put it in the press release, the goal is to "accelerate Verizon's broadband and mobility convergence strategy." Customers who buy both mobile and internet from the same provider generate higher average revenue and are less likely to churn in comparison with customers who only buy a single service."
"Verizon's plan to purchase Frontier will expand the company's reach to 31 states and the District of Columbia. The agreement with Eaton Fiber, an affiliate of Tillman Global Holdings, will target markets outside of Verizon's and Frontier's current fiber-to-the-home footprint. The Verizon/Eaton Fiber Deal According to the press release, Eaton Fiber will "fund and build the network and be responsible for network maintenance and installation." Verizon's responsibilities will include sales, marketing, and end-user customer service."
"The wording of the release suggests that other providers also will be able to use the network, but Verizon will have a head start. "Verizon will be the exclusive retail provider of residential fiber services over the new network through the build phase and for an additional time period, ensuring competitive advantage in subscriber acquisition," the release states. What the Others Are Doing AT&T also has been making fiber deals targeting areas outside its broadband footprint."
Bundling mobile and internet increases average revenue per user and reduces churn, motivating providers to pursue combined offerings. Verizon will expand reach by buying Frontier to cover 31 states plus DC and by partnering with Eaton Fiber to build and operate new fiber-to-the-home networks outside current footprints. Eaton Fiber will fund and build networks and handle maintenance and installation; Verizon will manage sales, marketing, and customer service and will be the exclusive residential retail provider during the build phase and for an additional period. AT&T pursues fiber expansion through deals and a BlackRock joint venture. T-Mobile relies on fixed wireless and lacks extensive fiber footprints.
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