Verizon Wireless Plans LTE Device Rollout, Targets Rural Markets
Verizon Wireless completed LTE field trials and is moving onto the pre-commercial stage, Verizon Wireless CEO Lowell McAdam said at the Barclays investor conference Wednesday. The carrier plans to showcase its LTE offerings at the 2011 Consumer Electronics Show in Las Vegas. “I think you will be surprised at the number and variety of (LTE) devices that we bring to the table,” McAdam said. The carrier also plans to expand LTE to rural areas.
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Up to five additional LTE devices are planned for the first half of 2011, McAdam said. The carrier plans to offer more devices like smartphones and tablet computers to spur spending on high-bandwidth applications like HD movies and games, he said. Verizon has three LTE test markets: Boston, Seattle and Erie, Pa. The Pennsylvania market trial is geared to testing rural LTE applications, McAdam said. Verizon seeks to establish partnership with rural carriers to accelerate LTE deployments in remote places and make C-Block the frequency for broadband in the U.S., he said. LTE will make it cheaper to provide data: Data transmissions on LTE networks will cost as little as one-third as much as it does over older networks, McAdam said.
McAdam said he was disappointed in the FCC wireless annual competition report (CD May 21 p1) that omitted the conclusion that the industry was effectively competitive, saying he didn’t believe the report was based on facts. Additionally, the FCC’s proposal to regulate the Internet could be “dangerous to the overall health of the industry,” McAdam said, though the plans won’t hinder Verizon’s investment in LTE. Meanwhile, the wireless industry needs to focus on spectrum efficiency, McAdam said, urging the industry to put as much effort in improving efficiency as finding new spectrum. But the industry needs more spectrum in areas like public safety, he said.
Sprint Nextel is performing better, which is a positive for the industry, McAdam said. “A company that’s wounded does desperate things,” he said. Sprint has been aggressive in cutting the price of its service plans. But Sprint appears to be stabilizing, McAdam said, suggesting that there will be fewer cuts down the line. While Verizon Wireless has a limited presence in prepaid, it has expanded the prepaid business through reseller agreements, McAdam said. Margins for resellers are as good, if not better, than traditional postpaid business, he acknowledged. But McAdam said he wasn’t “enamored” with the idea of bringing its brand down to the prepaid level.
Regarding the growing demand for data services, “I think this concern over unlimited megabytes on a smartphone will go away as we bring new devices and new applications onboard,” McAdam said. The services offered on 4G could change how data plans are priced, he said, saying consumers could have multiple products connected to the network. On throughput, McAdam said Verizon has recorded throughput in the 8 Mbps to 12 Mbps range, and he expects commercial LTE speeds will be better than 7 Mbps. He said the company is working with several technology firms to explore compression techniques that could improve video over LTE.
Demand for Verizon’s HTC Droid Incredible has been better than expected, the CEO said. The company is having a difficult time keeping the smartphone in stock due to component shortages, specifically with the phone’s home screen made by Samsung, he said. But the manufacturer has ramped up production and Verizon expects to meet the demand soon, he said.