Verizon (VZ) remains committed to its plans to collaborate with rural wireless operators for rolling out 4G services based on the Long-Term Evolution (LTE) wireless broadband standard. In addition to rural carriers, Big Red is also seeking partnership with tower and backhaul service operators to bring 4G LTE services in rural parts of the U.S. Verizon has highlighted these strategies in a recently launched website, “LTE in Rural America”.
Verizon announced its plans in May 2010 to license its coveted 700 megahertz (MHz) spectrum (radio airwave) to a number of rural carriers as part of an effort to build the 4G LTE network. The carrier spent $9.4 billion for purchasing the spectrum at the Federal Communications Commission (FCC) auction in 2008, providing the platform for 4G network deployments.
Per the proposed deals, Verizon will license the spectrum to the rural operators against a nominal fee. The local carriers will roll out the 4G LTE services in their respective territories. Either Verizon or its local partner would be responsible for providing network equipments. The carrier is also planning for data roaming agreements with local operators. This will allow local customers to roam on Verizon’s network and Verizon customers to access rural network.
Verizon’s plan, which has been backed by the FCC, is aimed at accelerating the deployment of 4G LTE network in rural markets that lack sufficient wireless coverage. Associations representing rural wireless carriers including the Rural Cellular Association (RCA) have so far taken a neutral stance on Verizon’s proposal and are currently evaluating its pros and cons. However, they have eulogized Verizon’s recognition of the rural carriers for bringing LTE to rural markets.
Verizon plans to commercially launch its 4G LTE services in fourth-quarter 2010 across 25 to 30 markets (covering 100 million subscribers), ahead of archrival AT&T’s (T) scheduled LTE network launch in 2011. Verizon also hinted that it may roll out 4G LTE handsets in May 2011, ahead of its previous mid-2011 expectation. Its Tier-1 U.S. rival Sprint Nextel (S) has launched the nation’s first 4G handset “EVO 4G” to great fanfare on Jun 4, 2010.
Leveraging the 700 MHz spectrum, Verizon successfully tested its LTE network in Boston and Seattle demonstrating encouraging throughput levels. The LTE network is expected to deliver average downlink speeds of 5 to 12 megabits per second (Mbps) in a practical setting.
Verizon recently unveiled its pricing strategy for 4G LTE data plans. The carrier has opted for tiered pricing (as opposed to the current unlimited plans) in which tariffs will be levied on the basis of data consumption. Verizon stated that the cost of transmitting one megabyte of data over its LTE network would be half to one-third the cost of transmitting the same data over its 3G network.
Besides sharing the significant network build-out costs and filling coverage gaps in rural areas, partnership with rural operators will enable Verizon achieve its target of deploying 4G LTE across its nationwide 3G network footprint by end-2013.
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