Verizon Communications Inc. announced deals Tuesday making Apple Inc. and Google its first video providers for a superfast 5G wireless service the company plans to launch in four cities later this year.
The home broadband service will debut in Los Angeles, Houston and Sacramento, California, as well as the newly announced fourth city of Indianapolis, Verizon said in a statement.
With the introduction, Verizon will provide 5G customers either a free Apple TV box or free subscription to Google’s YouTube TV app for live television service, according to people familiar with the plan.
After shelving its own online TV effort, New York-based Verizon decided to partner with the two technology giants for video content, a first step toward eventually competing nationally against internet and pay TV providers such as AT&T Inc. and Comcast Corp. Using fifth-generation wireless technology, Verizon plans to beam online services to home receivers, delivering speeds that match or exceed land-line connections.
Subscribers to the 5G service will also be offered live NFL and NBA games, as well as news programs through Verizon’s own Oath media division. The Apple TV box would serve as the portal for living-room access to video programming, while Google’s YouTube TV offers more than 60 channels of live television for $40 a month.
The upcoming launch of 5G service will be a key test for Verizon. The largest U.S. wireless carrier is pressing ahead with an expensive network technology upgrade that must surmount several challenges.
High-frequency 5G radio signals are easily disrupted by rain and foliage and remain commercially unproven. But, if successful, the technology could lead to as much as $200 billion a year in industry-wide development spending.
Verizon Chairman Lowell McAdam, who handed the title of CEO over to Hans Vestberg this month, staked out a different path than AT&T and Comcast, which have acquired movies and TV programming by spending billions purchasing media companies. McAdam chose to develop a mobile media and advertising venture through the purchase of AOL and Yahoo! For video entertainment, he’s seeking allies, not assets.
“It’s our belief that we’re positioned perfectly to have the partnerships that we need to be successful,” McAdam said on an earnings conference call last month when he addressed the 5G video plan. “We’re not going to be owning content, so we’re not going to be competing with other content providers. We’re going to be their best partner from a distribution perspective.”
Verizon scaled back its own TV ambitions, ceding the market to providers like Netflix and Sling TV. Earlier this year, the company killed go90 after it failed to catch on with its target audience of teens. And its live online TV efforts were eventually shelved as the market grew crowded with offerings like Dish Network Corp.’s Sling and AT&T’s DirecTV Now.
Some details of the new service, such as timing and price, are still under discussion, according to the people.