& cplSiteName &

Verizon's 4G Strength Keeps It Above the Fray

Sarah Thomas
1/21/2014
50%
50%

There's no doubt that Verizon is now first and foremost an LTE operator, and its strength in 4G has kept it above the competitive fray -- for the time being, at least.

Verizon Wireless 's initial LTE deployment is complete as it now covers 99% of its 3G network footprint and has 4G available to 97% of the US population spanning 500 markets and covering 305 million PoPs, including areas served by its Rural America partners.

The carrier announced Tuesday that it activated 9 million LTE devices in the fourth quarter, giving it 42.7 million total LTE devices in its subscriber base, making up 44.1% of its postpaid connections, up from 23.3% a year ago. About 69% of its total data traffic is now carried on LTE.

In announcing the carrier's fourth-quarter earnings, Verizon CFO Fran Shammo said that 58% of Verizon's smartphone customers are on 4G. It also had its best quarter ever in tablets, bringing its total tablet base to 3.6 million, but it didn't break out how many had LTE subscriptions attached.

Shammo did note that Verizon still has 24.7 million 3G customers, but it's clear that LTE is its focus, especially as it is set to close its acquisition of Verizon Wireless from Vodafone Group plc (NYSE: VOD) on February 21. The carrier has said in the past that it plans to introduce LTE-only devices this year, so upgrading those 3G customers will continue to be a priority in the coming months. (See Verizon Eyes Independent, Converged Future and CTIA: Verizon Pushes for Single-Mode LTE.)

Continuing to bolster capacity in its now complete LTE network will also be a 2014 priority. Verizon will continue to expand its LTE network over its AWS spectrum holdings in 50 cities in the first half of the year and is preparing to implement LTE-Advanced features in its network in 2014. The carrier is also working on deploying voice-over-LTE across its network this year. (See T-Mobile Spends $2.4B on Verizon Spectrum , Verizon Gearing Up for LTE-Advanced Services?, and AT&T's VoLTE Phones Start Trickling Out .)

Unconcerned about the Uncarrier
The strength of its 4G growth has allowed Verizon to stay out of the marketing and pricing fray with T-Mobile US Inc. for the most part. Its primary response has been with its Edge upgrade program that allows customers to pay off their device over 24 months. Shammo said the Edge program is going well, but it's generating less than 1% of profitability now. It's more important from a competitive perspective than a business one. (See T-Mobile to Pick Up 'Evil' Family Fees.)

"If you look at what's going on, it's the price shift from service to equipment," he said, stressing that it's not a price war. Verizon's total volume of upgrades was less than last year owing to some policy changes it made, he said, but he won't give guidance on 2014 until the Vodafone deal closes.

Shammo did admit that a segment of its customer base is responding to competitive offers and said that Verizon will "make necessary changes to compete against those changes." But he also stressed the strength of the Verizon brand, its reputation for network quality, and its LTE coverage map that dwarfs competitors.

Industry analyst Craig Moffett agrees that Verizon hasn't had to respond to T-Mobile's "Uncarrier" ways because of the strength of its 4G network, but he's not certain that can last. Its prices remain much higher than the competition, and he believes consumers will soon say "enough is enough."

"With their Vodafone deal now on the brink of closing, Verizon is now a heavily-levered behemoth that has doubled-down on the U.S. market just before the food fight got sloppy," Moffett writes in a research note. "They are vulnerable precisely because they have been so successful."

Overall, for the fourth quarter, Verizon added 1.7 million subscribers and activated 8.8 million smartphones, down from 9.8 million a year ago, but up from 7.6 million in the third quarter. It finished the year-end quarter with wireless revenues of $21.1 billion, up 5.7% over last year. (See Verizon Makes $7.9B Profit in Q4.)

— Sarah Reedy, Senior Editor, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/21/2014 | 5:22:17 PM
Re: On the Edge of a price war?
Yeah, and coverage has a lot to do with geography. When you decide on a provider, you go by what works where you live, work, and spend most of your time. You probably also get recomendations from people in teh same area. So, if T-Mobile works well enough, it'd be quite attractively given the price.
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
1/21/2014 | 12:21:38 PM
Re: On the Edge of a price war?
With Both TMo and Vz you get what you pay for.  At least locally, Vz is still the best network in terms of coverage and more subjectively speed.  TMo being the bang for the buck choice.
KBode
50%
50%
KBode,
User Rank: Light Sabre
1/21/2014 | 12:13:22 PM
Re: On the Edge of a price war?
For me, and I think a lot of people, it continues to come down to network coverage. Verizon has the vastly larger network, and even then I still run into huge pockets along major NYC area highways where service simply cuts out completely. T-Mobile isn't even remotely THAT good to Verizon's coverage yet, which leaves me hesitant to switch, even if I'd be saving a fairly significant amount of money.

I personally tire of Verizon's restrictive policies on handset openness (I would prefer to own a Nexus 5, but they won't offer it), which may drive me T-Mobile's direction once their network is a little more robust.

Assuming Tom Wheeler doesn't let Sprint buy T-Mobile, of course. :)
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/21/2014 | 11:53:29 AM
Re: On the Edge of a price war?
I completely agree, and I thought AT&T might be affecting it more too. It's taken over its more reliable verbage in its marketing and its LTE footprint is getting closer to Verizon's. I believe AT&T is still a bit cheaper, but maybe not enough to make a different. The difference between Verizon and T-Mobile, however, is quite large. Surprised it hasn't had more of an effect. 
KBode
50%
50%
KBode,
User Rank: Light Sabre
1/21/2014 | 11:50:00 AM
Re: On the Edge of a price war?
I had my doubts that Verizon could continue to keep data prices high and lean on the "hey, you're paying more because it's such a fast and reliable network," but users pretty clearly keep paying the prices asked. I suppose a lot of that has to do with the company's customer service rankings, but you would think over time these T-Mobile efforts could be more disruptive. Most of Verizon's counter offers are very modest, and seem more designed to look like they're responding -- without actually responding.
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
1/21/2014 | 11:41:41 AM
On the Edge of a price war?
Verizon isn't completely above pricing and marketing changes. It also announced tweaks to its Edge program today, including dropping its basic $40 500MB plan to only $20 for 250MB. It says it's for a limited time, so that sounds like a competitive response to me. It also reduced the wait time to upgrade phones from six months to just one.

 
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Charting the CSP’s Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it’s going from two industry veterans.
LRTV Custom TV
Cisco's Innovations in Cable

5|26|16   |   03:18   |   (0) comments


Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
DT: Telcos Must Escape Vendor Prison
Iain Morris, News Editor, 5/24/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
Cisco's Patel Hails 'Microculture' Successes
Iain Morris, News Editor, 5/26/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
AT&T's Margaret Chiosi Retires
Ray Le Maistre, Editor-in-chief, 5/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.