Wednesday, May 26, 2010

Verizon Wireless Sees LTE Changing Usage and Pricing Patterns

Pricing structure is one of the ways that LTE will change the mobile broadband game, said Lowell McAdam, Verizon Communications - EVP, President and CEO Verizon Wireless, speaking at the Barclay Capital conference this week.

The 700 MHz C-Block spectrum will prove to a strategic advantage for the company, said McAdam, especially since it will not have to piece together different bands for different markets across the country. Verizon Wireless has LTE trials running in Boston, Seattle and Erie, Pennsylvania, where some rural applications are being tested.

The LTE trials have proven what physics predicted -- the 700 MHz spectrum is delivering excellent in-building penetration, which will also be good for machine-to-machine applications. Verizon Wireless estimates that it will get up to 3.5X the penetrating power of its competitors.

As for the expected average downlinks of the upcoming service, Verizon Wireless has been discussing figures of about 7 Mbps. McAdam said this number is conservative -- especially in light of theoretical numbers of 120 Mbps or more -- and that the field trials so far indicate that downlink performance will exceed the 7 Mbps range. The field trials are also indicating a 30 millisecond delay on the network, which would make video gaming a possibility. McAdam said he expects to see a variety of LTE devices at CES 2011 -- not just LTE cards and dongles.

Looking ahead, McAdam said he expects that most consumers will ultimately have a number of devices that need connectivity -- four, five, six or perhaps as many as 20 devices. Consumers will want to buy "a bucket of megabytes" to be used any way they want by any of the devices. Voice becomes irrelevant because Verizon Wireless expects that by 2012 the voice that it sells on LTE will all be VoIP. So the game will not be about unlimited megabytes on a smartphone, but about tiers of service for all these devices.