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WALTHAM, Mass.–Verizon Wireless, the nation’s largest wireless provider, is sprinting ahead of its competitors to get a leg up in the 4G wireless market.
Verizon Wireless
Verizon has already spent millions of dollars building the 4G LTE network, and it has stopped investing in older 3G technologies to get the newer services rolled out. It launched the first LTE service in 38 markets in December with only a few laptop card products. And today it’s shipping LTE phones and Mi-Fi devices in addition to its PC laptop cards in nearly 100 markets.
The company is way ahead of its main competitor AT&T in terms of its 4G deployment. And the LTE technology offers faster speeds than Sprint Nextel’s 4G service, which uses WiMax technology deployed by Clearwire.
Next week, it will deploy the network in its 100th market. And it plans to reach 175 markets by the end of 2011. It already serves more than 104 million total wireless connections. The company also recently opened its first “Innovation Center” in Massachusetts, where companies large and small can work directly with Verizon engineers to build new products and services for the network.
CNET sat down with Verizon Wireless CTO David Small at the opening of the new Innovation Center to ask him about the network, get a feel for what he thinks of the competition, and to ask him why the company eliminated its unlimited mobile data plan. Below is an edited excerpt of the conversation.
Q: AT&T announced its first LTE products this week. What do you think about the news? Does this mean that the LTE horse race is on?
Small: We announced some time ago that we were going to build an LTE network. Our 4G LTE network currently covers more than 110 million Americans.
AT&T is going to launch five markets this summer. And from the list of cities where AT&T plans to initially launch its service, noticeably absent are New York City and San Francisco among other major markets. Recently, I read that the CEO of AT&T Wireless said he believes AT&T’s LTE network will be indistinguishable from Verizon’s in the next couple of years. Maybe he assumes we will be sitting static. But as you can see, we are not.
We will soon announce our 100th market for LTE. And we believe that to compare us to AT&T is not a fair comparison.
AT&T has argued that its HSPA+ network in addition to its LTE network will offer a faster network over a wider footprint than the combined Verizon 4G LTE and 3G EV-DO networks. What do you think about that argument?
Small: Well, that’s their theory. But if you look at the recent testing, it validates something different. There have been some pretty high-profile third-party studies that have stated that the reliability of the EV-DO network is far above our competitors.
And that really tells me that we made the right decision. We identified LTE as the next-generation technology to use to build our 4G network and we decided to not invest further in advanced EV-DO technology and we went with a new technology.
I’ve been using a 4G LTE Mi-Fi device from Verizon for the past couple of months.
Small: That’s great. How do you like it?
I love having access everywhere. But my biggest complaint is that the battery life on the device is really awful. What’s Verizon doing to improve on this?
Small: There is a lot work being done to increase battery life. There are always trade-offs between battery life and functionality. But the battery technology is improving. And there are improvements in charging technology. There’s also more being done in portable charging, so that you have accessories that can connect to any device and offer power. You can also tether the device to your laptop.
I’ve heard similar complaints about battery issues from some smartphone customers. But what you have to keep in mind is that these are pocket computers. That said, it’s something we are working on continuously.
Since we’re on the topic of LTE, can you tell me when the iPhone will get LTE?
Small: No comment. That’s for the folks in Cupertino to answer.
Well, you can’t fault a girl for trying.
Small: I guess not, but it’s really a question for Apple. We can’t say anything.
You mentioned that the LTE network will soon be deployed in its 100th market. How important is this milestone?
Small: In terms of milestones, this is a pretty big one. We are very proud of the rapid and continuous expansion of our network. But as we think of expansion, it’s very important to realize that even as we move into new markets, we are still going in and filling gaps in existing markets. We launched phase one in December, so as we go into phase two we are also making sure to optimize and tune performance in the first-phase markets. It’s a continuous process.
Earlier this month, Verizon changed its pricing to a “usage-based model.” Now instead of unlimited data, you offer several tiers of service starting at 2GB for $30 a month. AT&T offers something similar, but its lowest tier is 200MB for $15. Verizon is clearly more expensive. Would you say that Verizon is the premium provider in the market, and therefore can charge more than its competitors for service?
Small: We have a premium network. There is no question about it. We are a leader in the market. JD Power, Consumer Reports, and others have all given us high marks for our superior network. And we believe customers see value in the reliability and performance of our network.
There’s been a lot of talk from the FCC and the wireless industry about the need for more spectrum. AT&T claims the spectrum crunch is why it needs to buy T-Mobile USA. By contrast, Verizon has said publicly that it’s fine with its current spectrum position. But as you add more services and data-hungry apps to the 4G LTE network, how will you handle the demands on the spectrum resources?
Small: We have said we are in great shape in terms of spectrum through 2014 or even 2015. We have a strategy in place to re-farm spectrum and redeploy some of the non-LTE spectrum for use for LTE. And we’re looking for potential spectrum opportunities. And if it’s the right place at the right time, we would purchase more spectrum.
I also think that data consumption on these high-speed networks is different than traditional data consumption. Someone once referred to it as being “bursty not thirsty.” And I think that’s a good way to think of it. Take machine to machine as an example. There are apps that aren’t that data-intensive, but they need the low latency of the LTE network. And even with video, 50 percent of the time people open a Youtube video, but don’t finish watching the whole thing.
There are lots of things that can be done with video buffering and to adjust things depending on the size screen you are watching the video on.
That makes sense. But if Verizon has enough spectrum and plenty of network capacity, why limit customers to 2GB of data per month?
Small: We are not limiting customers to 2GB of data. They can pay for additional data consumption if they need it. What we have found is that the vast majority of customers don’t come anywhere near the 2GB limit. So most people won’t be affected by the change in the pricing plan, but for the small percentage of people who do consume more than 2GB of data per month they will be impacted.
If you find that more people are bumping against that 2GB ceiling would you consider raising it in the future as people use more bandwidth-intensive applications, like video?
Small: I am not going to announce any new pricing plans here. But we are thinking about the best way to roll out new network concepts like billing based on time of day. Maybe people would want to download video at 1 a.m. when the network is not as busy. So time of day versus network utilization could be something we think about down the road.
Verizon has been a huge supporter of Google Android phones and now the Apple iPhone. But what about other mobile OS platforms? A few months ago at Mobile World Congress, Tony Melone, CTO of Verizon Communications, who also used to be the Verizon Wireless CTO, said he wasn’t that impressed with Microsoft and its Windows Phone 7 platform. What do you think?
Small: The way I think about it is that if there is significant demand for a particular platform, we will give it a good hard look. The Google Android OS didn’t exist just a few years ago. So I would never say never about any platform.
Update 7/14/11 12:45 p.m. ET: David Small’s comment about network coverage has been clarified. Verizon’s 4G LTE network currently covers more than 110 million Americans.
