Verizon Wireless will finish the nationwide rollout of its 4G LTE network by the middle of 2013, covering as much of the U.S. as its current 3G footprint. The timeline is about six months sooner than Verizon has previously stated; Verizon had previously predicted its 4G coverage would match its 3G network by the end of 2013.
The comment comes from Verizon Communications CFO Fran Shammo at the Wells Fargo Securities Technology, Media & Telecom Conference, who was covering a number of Verizon offerings, including wireless and FiOS (a full transcript in PDF format can be found here).
Shammo said that despite four major service disruptions in the LTE network in 2011, the LTE network is now stable. “The 4G LTE network — had some flaws here and there. But that’s normal when you stand up a new state-of-the-art network. But currently today it is extremely stable, it is performing very well. Thirty-five percent of our data traffic is now carried over that 4G LTE network, and you can see that people are massively migrating to that network, via share plans, via the handsets that we are offering,” he said.
The next challenge following nationwide coverage is increasing its footprint density and network speed, said Bill Menzes, principal research analyst at Gartner. “Given the leap in data speeds that LTE already provides over EV-DO and 1xRTT, Verizon will try to ensure it has sufficient coverage and capacity to support those speeds; the less that LTE device users default to 3G coverage, the better for Verizon,” he said.
Verizon’s LTE network now covers 250 million people, around 80% of the U.S. population, putting it way ahead of the competition. AT&T Mobility, the next closest competitor, hopes to offer LTE to 250 million people by the end of 2013with full rollout by the end of 2014. Sprint and T-Mobile are considerably further behind, with T-Mobile only just beginning its rollout.
So it’s a big advantage against Sprint and T-Mobile as those two grapple with subscriber losses and various other competitive issues, but not as much with AT&T, said Menzes.
“Over the same time frame, Verizon and AT&T will provide LTE coverage to the vast majority of their customers; the bulk of those are consumers and businesses in tier one and two markets, so customers will continue basing their mobile carrier choice on their own experience, pricing and promotions,” he said.
Having a denser LTE footprint for the next year or so may help Verizon in tier three and smaller markets where it can offer HomeFusion or a variant for SMBs, plus the home automation product or perhaps even a stripped-down version of FiOS, he added.
T-Mobile and Sprint have other problems dogging them, Menzes notes. Even if it had LTE, T-Mobile still wouldn’t have the iPhone, while Sprint is dealing with customer defections from the old iDEN network. “The $3.1 billion Sprint just got from Softbank will keep it from falling further behind, but unless it intensifies its buildout plan it still won?t match the AT&T/Verizon footprint by the end of next year,” he said.
Shammo said it is unlikely that Verizon will try to acquire a small regional competitor because it is unlikely to be approved by regulators. He added that Softbank’s plan to purchase Sprint Nextel will strengthen Sprint, which would be good for the overall industry.
On the issue of smartphones, Shammo said Apple and Android are great platforms and that there is a need for a third ecosystem, which he believes Windows Phone offers. “I think Windows, based on what we have seen, it is a very good platform. And we will launch that platform, and I hope that does bring some competition because when you have competition, then the innovation just elevates itself,” said Shammo.