For Immediate Release
Chicago, IL – June 1, 2010 – Zacks.com Analyst Blog features: Verizon (VZ), AT&T (T), Motorola (MOT), Research In Motion (RIMM) and Sprint Nextel (S).
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Here are highlights from Friday’s Analyst Blog:
Verizon Confirms 4G LTE Pricing
Verizon (VZ) has unveiled its pricing strategy for its 4G Long-Term Evolution (LTE) service which is expected to be commercially launched later this year. As expected, Big Red has opted for a tiered (or metered) pricing policy for its LTE data plans.
The tiered price structure is in contrast with Verizon’s existing popular flat monthly unlimited data plans for its 3G services. 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.
Since the customers will be connecting multiple (five or more) devices to the LTE network, data services will be offered in “Buckets” of data (by megabytes) with different fees attached to them. The sunny side of this policy is that customers who use less volume of data have to pay much less than those using their smartphones to access high-bandwidth applications (such as HD video streaming or downloading huge data files).
In essence, customers using more data on the 4G LTE network may experience a bill shock, especially if they exceed the allocated monthly data limit, given the overage charges.
Verizon successfully completed field testing of its LTE network in Boston and Seattle demonstrating encouraging throughput levels. The carrier has used its coveted 700 megahertz (MHz) spectrum for 4G data transfer to successfully test applications such as web browsing, voice transmission, video streaming and file upload and download.
The LTE network is expected 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. The carrier 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.
Verizon recently hinted that it may roll out 4G handsets in May 2011, ahead of its previous mid-2011 expectation. The carrier plans to introduce the handsets at the Consumer Electronics Show (CES) in January 2011.
At least five handsets from leading vendors such as Motorola (MOT), Research In Motion (RIMM), HTC and LG are expected to be unleashed by Verizon, capable of running on the LTE network. However, first devices to access the LTE network will be data cards and modems for laptops which will be introduced in late 2010.
Verizon’s new pricing strategy indicates a paradigm shift in wireless tariff structure. The carrier’s archrivals AT&T and Sprint Nextel (S) are also supporters of the tiered pricing system. So, the days of unlimited data plans are indeed numbered.
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