Verizon to include home broadband in Pay-as-You-Go extension

Verizon Communications Inc. is preparing to launch a home wireless Internet service with a pay-per-use option. The service will come out next month available to members of bonus programs. Thus, the company doubles its own development prospects in the prepaid market, since increasing the number of new customers is quite a challenge.

Partnering with the largest U.S. retailer, Verizon will begin selling a home router to connect to an outside wireless network, spreading the Wi-Fi signal throughout the chosen location. However, the product hasn't yet gone public.

A new version of wireless broadband is expected to appear due to market volatility. The reason is the price surge, as well as the prospect of an impending recession in the U.S. economy.

"The prepaid market has been operating for years, while the economic downturn is making it more attractive to consumers with tight budgets and customers whose credit history prevents them from using postpaid services," noted Tammy Parker, an analyst from GlobalData.

Despite the ambivalence towards prepaid services in recent years, Verizon today sees the prospect for its further development. It will target customers with little or no credit history, including renters, students and people without bank accounts. Verizon became the largest prepaid mobile operator in the US last year after acquiring Tracfone for $6.6 billion. Since the deal, Verizon has introduced a new brand, Total, operating with a prepaid system. It will compete directly with T-Mobile's Metro and AT&T Inc.'s Cricket, company’s representatives said.

Later, Verizon is likely to offer Total subscribers a prepaid package of home Internet and mobile services with discounts and bonuses to ensure its own customer base growing. The company's performance, showing increased postpaid offerings this year, was lower than the other three telecom operators.

The emergence of a broadband alternative will aggravate the cable industry's current issues. Its giants Comcast Corp., Charter Communications Inc. and Altice USA Inc., have been losing television customers for years. Since the advent of wireless broadband options, cable Internet subscribers have barely changed. 

Goldman Sachs Group Inc. analyst Brett Feldman sees a decline for the nation's top three cable giants in the users’ number by 25,000 as for the third quarter. On the other hand, Feldman mentioned customer growth for Verizon and T-Mobile is driven by home wireless Internet service offerings.