Verizon (NYSE: VZ) hits a milestone this weekend when its comes to its 4G network, and competitors Sprint Nextel (NYSE: S) and AT&T (NYSE: T) will be watching closely. The telecom company announced that it will be launching its long awaited fourth generation long-term evolution wireless network Sunday, December 5. That means Verizon smartphones in 38 metropolitan markets and 60 United States airports will have access to data transfer speeds that are claimed to be 10 times faster than on Verizon’s existing 3G network.
City markets supporting the new high speed network include Chicago, Miami, Dallas, Atlanta, Seattle, Boston, and a multiple cities in both New York state and California. Data plans for the new 4G LTE network will run subscribers $50 per month for 5GB and $80 per month for 10GB.
The announcement follows Verizon executive Tony Malone’s words to the Associated Press at the beginning of November confirming the limited 4G debut, but the Sunday launch is coming much sooner than expected. Malone indicated on November 4th and the 60 airport, 38 city rollout wouldn’t come until the first quarter of 2011. The early launch should help Verizon combat the 4G marketing blitz by its competitors. T-Mobile USA began touting their HSPA+ network as “America’s largest 4G network” earlier this year and Sprint launched their own WiMax standard 4G network (with the help of Clearwire (NASDAQ: CLWR) just six weeks ago, claiming it was the country’s first 4G network. Sprint, T-Mobile, and even Verizon’s new LTE technology 4G networks are not proper 4G networks however, at least by the standard established by the International Telecommunications Union. A true 4G network according to the ITU will allow data transfer speeds of 100 megabits per second. Sprint’s only allows up to 6 megabits per second while T-Mobile’s averages around 8 megabits per second. Verizon’s network launching this coming Sunday is said to accommodate transfer speeds between 5 and 12 megabits per second.
While these speeds don’t meet the ITU’s standards for 4G status, Verizon’s technology at least comes close. The new LTE-Advanced and WiMax 2 standards, both of which have yet to be implemented by a major world telecom, are the only wireless standards the ITU recognizes as truly 4G. Verizon’s new network, however, will bring some progress to the U.S. mobile market. LTE technology is intended to unify both the GSM and CDMA wireless standards. Verizon’s new network is only the world’s third LTE to launch and is certainly the largest. (The other two are regional, namely the MetroPCS Communications (NYSE: PCS) network in Texas and Telenor (PINK: TELNY) in Sweden.) This soft launch should help Verizon work out kinks in the network before its expected full rollout in late 2011 and also allow the company to continue expanding its existing 3G network.
Verizon share price is up 2.5% from this past Monday thanks to the announcement of the 4G network’s early launch, trading at just above $32.50. Though there’s some dissention amongst Verizon’s ranks—European partner Vodafone (NASDAQ: VOD) is encouraging further development of the company’s 3G network before plumbing ahead with the 4G network—the new network should only help strengthen Verizon. Rumors still point to the announcement of an Apple (NASDAQ: AAPL) iPhone coming to Verizon and possibly the LTE network next year. If the company can foster a strong early subscriber base for its LTE network in addition to offering a line of smartphones powered by Apple’s iOS, Google (NASDAQ: GOOG) Android, and the Research in Motion (NASDAQ: RIMM) BlackBerry line, they will be nigh on unstoppable in the coming fiscal year.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
