Verizon (VZ) is reportedly planning to roll out commercial 4G services based on the Long-Term Evolution (LTE) wireless broadband technology during the fourth quarter this year. This brings forward the launch timeline, which was originally expected in late 2010. Based on the information provided by a company official, the carrier plans to commence user trials of the LTE network this summer.
Verizon has been conducting field tests of its 4G LTE network in Boston and Seattle which are expected to be the initial markets for the commercial network launch. Trials in these two test sites have shown the potential of achieving peak downlink speeds of 40 to 50 megabits per second (Mbps) and peak uplink speeds of 20 to 25 Mbps, significantly faster than the current 3G deployments.
For its 4G trials, Verizon is leveraging the network infrastructure provided by technology partners Ericsson (ERIC) and Alcatel-Lucent (ALU), network equipment vendors Starent Networks and Nokia Siemens and trial devices providers LG and Samsung. The company continues to expect achieving average network speeds of 5 to 12 Mbps on the downlink and 2 to 5 Mbps on the uplink in a practical setting.
Verizon continues to invest heavily on 4G, representing a key future growth driver. The carrier has opened a new “Technology Innovation Center” in Waltham, Massachusetts, to foster the development of a range of devices compatible with the LTE network platform.
LTE has emerged as the most preferred base technology standard for 4G due to its fast data transfer capability and ability to handle bandwidth-intensive applications. LTE is faster than other leading 4G standards including WiMax. Swedish telecom operator TeliaSonera (TLSNY) became the first carrier in the world to launch 4G LTE services (in Stockholm and Oslo) in late 2009.
Verizon is progressing well in leapfrogging its archrival AT&T (T) in 4G roll-out initiatives. If the 4G network is launched as planned, Verizon will be the first carrier to offer commercial LTE services in the US as AT&T lags with its LTE service launch planned in 2011. Verizon plans to launch the LTE network across 25 to 30 markets (covering 100 million people) in 2010 and targets to provide nationwide coverage by 2013.
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 lightning-fast 4G services.
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