Verizon CEO Hans Vestberg thinks the company can compete with AT&T without buying any content.
- Verizon will bundle YouTube TV along with 5G in its four initial 5G cities.
- YouTube TV typically runs at $40 a month and offers more than 60 channels, including networks like CBS, Fox, and ESPN.
- The move seems aimed to disrupt the cable industry.
Verizon wants to help give you a great line up of TV channels - without any need for a cord.
The wireless giant will include YouTube TV service and Apple TV 4K along with 5G service to customers in each of its four initial markets - Houston, Indianapolis, Los Angeles and Sacramento - when the service hits these cities later in 2018.
The announcement seems an indication that Verizon believes it can compete with rivals in the telecom and pay-TV industries without acquiring content (unlike AT&T, which just closed a massive deal to acquire Time Warner).
Indeed, amid a buying frenzy for media content that has grasped the broader industry, Verizon has retained its focus on technology and network improvements.
That move isn't just about better cell phone service - Verizon is aiming much higher. It seems to view 5G as a cable-TV alternative.
5G may help accelerate cord cutting
Specifically, the decision to offer bundling of residential broadband service and live TV implies that customers would be able to cut linear-TV subscriptions to get similar programming for free.
"We think our technology and our network is out asset," Verizon CEO Hans Vestberg said on CNBC Wednesday. "And whatever partners we can get them and we announced yesterday, partnering with Apple, YouTube - I think we have another way to deal with our assets. Our distribution is fantastic."
YouTube TV typically runs at $40 a month and offers live TV distributed OTT, or "over the top," without a cable subscription. It includes more than 60 channels, including networks like CBS, Fox, and ESPN. Apple TV 4K is a product that allows viewers access to streaming services, like Netflix, HBO, and Hulu, and retails for around $179.
Verizon sees its 5G technology as a way to offer more choices within their home, whether that be how they access the internet or the kinds of content they can stream, a spokesman for Verizon told Business Insider.
Verizon doesn't seem likely to follow AT&T's playbook
"They recognize the value of content but don't feel that they need to control it or own it," said Mary Ann Halford, a former Fox International executive vice president who is now a senior adviser at the strategy consulting firm OC&C Strategy Consultants. "They believe there are plenty of players that are open to licensing or packaging their content with 5G."
Verizon also seems to have disruption of the industry in mind. 5G will give you "totally new innovation, how you can disrupt industries, change the way you're thinking about technologies," Vestberg said Wednesday.
It's unclear financially what the announcement means for consumers. Verizon has yet to announce how much 5G broadband service will cost, and it hasn't confirmed how long it will offer the YouTube TV bundle to customers.
But what's clear is that Verizon doesn't think it needs to pursue deals to compete with AT&T in the market. It's committed to its focus on 5G and what that means for technology improvements for customers.
"We we started to design the 5G, we decided we'll have a cordless world," Vestberg said. "You're going to get the connectivity that is 100% all of the time. And the speed that you have never seen before wireless."