Verizon Wholesale Turns On DIRECTV

, the wholesale arm of Verizon Communications Inc., is helping its former UNE-P resellers offer the triple play to residential customers in an effort to stave off competition from cablecos.

In what is an industry first, the company announced in early June an agreement with DIRECTV Inc. that will add digital satellite TV services to Verizons Wholesale Advantage voice service and highspeed data services. The bundle will be available to resellers throughout Verizons footprint, with the first customers expected to be turned up as early as the end of June.

This definitely ups the ante for cable MSOs competing against Verizon and Verizon resellers, says Fedor Smith, an analyst with industry consulting firm ATLANTIC-ACM, in a research note. By expanding the sales force selling triple plays, Verizon had dramatically enhanced its opportunity for penetration into their existing direct and resale customer bases.

In addition, Smith says the wholesale triple play even opens the door for wireless or MVNO carriers to create a quadruple play.

Verizon has been selling a bundled voice and data package with DIRECTV service since early 2004. On its Web site, consumers can order a Freedom Package that includes unlimited local and longdistance service with high-speed Internet and DIRECTV for around $105 per month depending on the market. Pricing for the wholesale bundle was not disclosed.

Amy Stern, director for wholesale product management at Verizon, says the DIRECTV relationship will allow Verizon Partner Solutions to extend the voice and DSL combo it introduced to wholesalers earlier this year to a triple-play offer. Thats what our wholesale customers are looking for to compete with the cable companies, Stern says.

Analyst Smith says the strategy is sound and will likely pay dividends for Verizon in the long run as it seeks to stem encroachment from cablecos.

Verizon will facilitate the relationship between the reseller and DIRECTV, but resellers will sign their own agreements with the DBS provider. In addition, Stern says, resellers will be able to use the Verizon Web-based tools to order satellite TV service and check order status.

We already have linkages set up with DIRECTV, so it makes it easier, cheaper, faster for the reseller to get into the business and start ordering services if they use the ordering tools that we have, Stern says, noting it also takes some burden off DIRECTV, which does not have to integrate with or train partners.

Billing arrangements, however, are negotiated between DIRECTV and the reseller. And the DBS service is co-branded with DIRECTV as opposed to private-labeled like the other components from Verizon.

For now, Stern says, the service is available only to residential customers, but Verizon and DIRECTV are considering requests to offer the service to commercial accounts.

She adds Verizon Partner Solutions is looking at other services that might be added to the bundle, but would not confirm whether a wholesale quadruple play might be in the offing.