Summary
Verizon Wireless has said that it will have an LTE network throughout the US in late 2013 or early 2014. However, it has not clarified what that exactly means. Verizon appears to be aiming for 90 to 95% coverage.
Analysis
It is very possible that in terms of POPs, Verizon Wireless will meet its goal. Sufficient capacity across the board is another matter. It is probably more accurate to state that by 2014, Verizon’s initial nationwide footprint will be completed. Severe congestion is expected to arise as various applications are introduced. One must think in terms of Apple’s iPhone to see that a good number of apps can eat up a large amount of bandwidth. Verizon’s management expects to be forced to move towards a smaller-cell solution. Nevertheless, the service provider in recognizing these issues and preparing in advance to deal will them, could easily put it in a position to dominate the 4G world. The initial targeted speeds downstream are likely to be 4 to 10 megabits.
It seems that around 92% coverage will set the stage for Verizon Wireless’ 4G effort. The percentage of the population having access to LTE appears to be the probable metric. It would almost certainly not be measured in terms of square miles. There are just too many uninhabited areas in the US. The portions of the country that are not served are in a position to be helped by the broadband stimulus funds. It all depends if there are enough middle mile projects that are supported by BIP/BTOP. The extent to which there is that application will determine how much the ISPs and potentially other carriers can deploy WiMAX in those unserved areas.
Regarding a separate matter, the offering of free netbooks by Verizon in order to get people to go to FiOS has another purpose. Verizon Wireless would love to have 4G handsets right away. However, the latest indications are that the cost of the chips makes it prohibitively expensive right now. A handset would have to be sold at $2,000 each. Verizon is still optimistic of beating the anticipated dates for having LTE handsets. Nevertheless, the first devices used on its 4G network are expected to be netbooks, laptops, etc. Still, providing complimentary netbooks is one of the first signs of the movement towards synergy between the FiOS and LTE networks.
The deployment of 4G at Verizon could easily slow down significantly in 2014-2015. Of course, in going out so far in terms of projections, it is harder to predict. The bulk of the network will probably be completed by that time. We expect a high percentage of Verizon’s CAPEX to be devoted to LTE next year.
Samuel Greenholtz consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
