Summary
A little over a year ago, we wrote: “As with FiOS, Verizon wishes to surprise the world with a very aggressive schedule for LTE deployment.” According to the source article, the CTO states, “Verizon Wireless is planning to light up its LTE nationwide network next year in one fell swoop.” The market is also apt to be stunned by the very early availability of 4G handsets.
Analysis
There are indications that Verizon Wireless has been working very closely with RIM on LTE-capable handsets. We believe that this functionality will be shipped in volume well before current predictions. Any speculation that Verizon will look to lead with Apple’s iPhone does not seem to have much foundation. Verizon will probably want a handset that is not me-too. It most likely wants its entire 4G offering to have its own identity. Another consideration is one of ego. Verizon passed on an opportunity to market the iPhone for 3G. If it were to go out in front with the Apple product, it would kind of be an admission that it initially made a mistake. In addition, Verizon Wireless will not mind AT&T continuing to struggle with the iPhone because of insufficient 3G capacity – at least for a while. Undoubtedly, down the road, the iPhone will eventually be deployed on Verizon’s network. It is not out of the question that Verizon will remain the only nationwide network in the US for quite some time.
The idea that Verizon Wireless “won't ‘tease,’ customers...with trial deployments” makes a very effective marketing weapon. While it will not be “a traditional market-by-market rollout,” expect the company to issue a separate press release for every significant city being penetrated.
Many analysts are looking for any reason that indicates that Verizon is behind schedule on 4G. Given history, it is reasonable to be cautious in prognostications. However, just as with FiOS, we expect another aberration to occur.
Some people have apparently even pointed to the fact that the COO stepping down is a negative sign. Yet, it is quite the opposite. Dennis Strigl’s departure has been in the cards for some time. In addition, with the entire network planning seemingly in place, Strigl’s job is essentially done. It seems to be somewhat analogous to Alfred Hitchcock getting excited about the detailed storyboard process for his movies, but finding the actual filming process to be somewhat boring.
The high level of speed in getting LTE out is partially based on Verizon’s overall network strategy that we talked about in the past. Gaining synergies between the FiOS and LTE networks is a high priority for the service provider. In other words, part of the premise is that any good fiber optic networking includes mobility. The seamless relationship between the FTTP end user and the mobility plan – making two phone numbers look like one – is not a hard thing to do – and it will happen sooner rather than later.
Verizon’s level of confidence also demonstrates that its major vendors, especially Ericsson, are coming through more or less on time with new equipment.
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.
