Verizon is close to deals making Apple and Google its first video providers when it launches a superfast 5G wireless service in four cities later this year, according to people familiar with the situation.
Under the deals, Verizon will offer 5G customers a free Apple TV box or a free subscription to Google's YouTube TV app for a live TV service, say the people, who asked not to be identified because the agreements haven't been announced.
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 and Comcast.
Using fifth-generation wireless technology, Verizon plans to beam online services to home receivers, delivering speeds that match or exceed landline connections.
The promotion would be for a limited time, the people say. 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, they say. 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.
Apple didn't immediately respond to a request for comment.
The upcoming launch of 5G service in Los Angeles, Houston, Sacramento, California, as well as newly announced Indianapolis 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'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.
-- Bloomberg News