Thursday, May 7, 2009

Verizon Wireless Sees Advantages in Rapid LTE Rollout

Verizon Wireless has a history of rapidly deploying new technology to gain a competitive advantage, said Tony Melone, SVP & CTO of Verizon Wireless, speaking at Ericsson's Capital Markets event in Boston, and the will do so again with LTE. Verizon Wireless is currently in the middle of phase 3 LTE trials and has already selected its principal vendors for the initial rollout. Phase 4 of LTE testing with begin soon using 700 MHz spectrum, thus getting the bugs out and seeding the first markets with LTE infrastructure.

In addition to its first mover strategy, Melone said Verizon Wireless' nationwide 700 MHz spectrum would prove to be another competitive advantage because it offers better propagation, better in-door penetration and will require significantly fewer base stations than spectrum held by the competitors. The company invested $9 billion to acquire the spectrum in last year's FCC auction. Verizon Wireless' goal is to blanket country with LTE as quickly as possible.

Will LTE bring down the price for mobile data? Melone said it is difficult to answer that question yet, but conceded that mobile data pricing is currently inhibiting the growth of the market and needs to change.

Will LTE make Verizon Wireless' current CDMA network obsolete? Melone said CDMA-1x provides highly efficiently voice transport and the billions of dollars invested in the current network is already a sunk cost, so there is not an imperative to migrate voice traffic to LTE. In his view, the company very well may still be operating the CDMA network in 2018 or 2020. The EVDO network, however, may prove to have a much shorter lifespan. At some point the company may consider incentives to migrate EVDO users completely to the newer LTE infrastructure.

A archived webcast of Ericsson's Capital Markets Day events is available online.

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