Verizon (VZ) has hinted that it may roll out 4G handsets in May 2011, ahead of its previous mid-2011 expectation. According to Verizon wireless CEO, at least five handsets from leading vendors such as Motorola (MOT), Research In Motion (RIMM), HTC and LG are expected to be unleashed by that time, capable of running on the carrier’s 4G Long-Term Evolution (LTE) network.
 
Verizon is also planning to unveil several tablet devices along with the 4G handsets. Manufactured by the likes of Motorola, LG and Samsung, the tablet computers will run on Google’s (GOOG) Android platform and will compete with Apple’s (AAPL) iPad. However, Verizon is still hoping to clinch an iPad deal with Apple.   
 
In March 2010, Verizon unveiled its plan of introducing LTE data cards and modems for laptops before launching the 4G handsets. This mirrors Sprint Nextel’s (S) strategy of rolling out USB data cards, dual-mode modems and routers for laptop users who connect to its 4G WiMax network. Sprint recently revealed its plan to launch its first 4G smartphone (dubbed “EVO 4G”) on June 4, 2010, ahead of market expectations.
 
Verizon successfully completed field testing of its LTE network in Boston and Seattle demonstrating encouraging throughput levels. The carrier has used its 700 megahertz (MHz) spectrum (purchased at the 2008 Federal Communications Commission auction) for 4G data transfer to successfully test applications such as web browsing, voice transmission, video streaming and file upload and download.
 
Verizon expects its LTE network to deliver average downlink speeds of 5 to 12 megabits per second (Mbps) in a practical setting. Based on a recently conducted test on laptops in a small pizzeria in Boston, the network achieved top downlink speeds of 8.55 Mbps.
 
Verizon plans to commercially launch its 4G LTE services in late 2010 across 25 to 30 markets (covering 100 million subscribers), ahead of archrival AT&T’s (T) scheduled LTE network launch in 2011. AT&T, which is currently focused on upgrading its nationwide 3G network, is expected to begin testing LTE this year.
 
We expect this technological lead to strengthen Verizon’s existing network footprint and drive wireless data revenues with increased margins as a result of new features enabled by the 4G services. While Verizon may get a chance to offer the iPhone in future, the 4G LTE phone represents a major boost for the operator as it will take full advantage of the superfast LTE network.
 
However, Verizon previously indicated that LTE data plans for smartphones may come with tiered (or metered) pricing as opposed to the existing intensely popular unlimited data plans. Under the metered data plans, tariffs will be levied on the basis of data consumption, which might discourage customers from using huge volumes of data.
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