Verizon Wireless' LTE Service—Case Study

Verizon Wireless launched its LTE network on 5 December 2010 in 38 major metropolitan areas, covering in excess of 110 million customers with 70% coverage in each market. Metropolitan areas for the initial LTE launch can be seen in the table below.

Additionally, the operator launched LTE in over 60 commercial airports across the country. Verizon aims to provide LTE coverage to two-thirds of the United States by June 2012 and nationwide LTE coverage by the end of 2013. As part of the process to achieve its goal, Verizon will add 140 markets during 2011, the initial launches being:

Alcatel-Lucent and Ericsson are the primary vendors for Verizon's 4G LTE network. Nevertheless, Verizon is working with rural companies to collaboratively build and operate 4G networks using their tower and backhaul assets. Kentucky-based Bluegrass Cellular was the first rural provider to partner with Verizon in November 2010, while a further 200 organisations have expressed interest in collaborations.

LTE Devices

The initial LTE roll-out will be supported by the LG VL600 USB modem; the Pantech UML290 USB modem will also be available. Both devices will be backwards-compatible with Verizon's 3G (CDMA 2000 1X EV-DO Rev. A) network, thus users will receive data coverage beyond the current 3G footprint. Verizon says that it expects consumer-orientated devices by mid-2011. Verizon users will be able to enjoy speeds 10 times faster than its current 3G network.

In January 2011, Verizon announced 10 4G LTE consumer-orientated devices that were all expected to be made available in the first half of the year: four smartphones, two tablets, two MiFi and mobile hotspots, and two notebooks (see United States: 7 January 2011: Verizon Unveils 4G Devices). Prior to the launch of these devices, there had been strong rumours that Verizon was to launch a new iPhone model that would be both 3G- and 4G-ready. However, these rumours failed to materialise, but speculation persists that Verizon will offer a 4G-capable iPhone handset. While neither Apple nor Verizon have confirmed this, it looks likely a 3G CDMA iPhone will appear in the next few months, followed by an LTE version at a later stage.

LTE Pricing and Services

The LG VL600 USB modem features a fixed USB connector and will cost US$99.99 (after a US$50 rebate) with a two-year agreement. The Pantech UML290 USB modem is also available at the same price, but has a 180º rotating USB connector and LED status indictor. Prices start at US$50 for 5GB of data, up to US$80 for 10GB of data, while overages run to US$10 per GB. Verizon has yet to provide details of the prices for the 10 LTE devices unveiled in January 2010.

Outlook and Implications

• Coverage to Increase: Verizon will be switching on additional locations and increasing coverage in existing areas over the course of 2011 on a monthly basis. The operator aims to reach an LTE population of at least 85% by the end of 2012 and provide LTE coverage to the whole country by the end of 2013.

• Competition from AT&T and MetroPCS: Verizon's launch of 4G LTE devices came shortly after AT&T announced that it is delivering 20 4G LTE devices in 2011. However, AT&T is not expected to launch its 4G network until the middle of the year, some six months after Verizon commercially launched its network (see United States: 6 January 2011: AT&T to Push on LTE, Android). Verizon must therefore make the most of the head-start it has on its rival and promote its devices, some of which will be available by March 2011 (all will be available by June 2011). MetroPCS will also provide Verizon with competition, even though the two operators are adopting very different strategies (see United States: 9 December 2010: MetroPCS LTE Service—Case Study). Verizon has upgraded its network to EV-DO Rev. A, while MetroPCS is based around CDMA 2000 1X. Verizon is looking to launch in a number of markets, aiming to cover two-thirds of the United States by June 2012, in contrast to MetroPCS, which is gradually launching its service with a market-by-market approach.