Verizon: Optical Equals Cheaper LTE

Everyone knows Verizon Wireless is going to spend billions upgrading its mobile networks to Long-Term Evolution (LTE) technology over the next few years, but a less-talked-about part of that cost lies in upgrading the backbone and metro layers that will support the expansion of faster wireless services.

At this week's Light Reading Live New York event about the quiet wonders of "Packet-Optical Transport Evolution," much of the talk was concerned with the difficulties of actually upgrading these key networks to 40 Gbit/s and beyond. (See LR Live: Verizon Plots 100 GigE RFP.) Unstrung couldn't pass up the opportunity, however, to question Stuart Elby, the Verizon Communications Inc. (NYSE: VZ) vice president of network architecture and enterprise technology, about how packet-optical technology relates to mobile networks.

Reducing costs, he says, will be one big effect of packet-optical, even at the edge of the radio network. See Elby's full comments by watching the video below:

Verizon isn't saying exactly how much it will spend on the optical upgrades. Its overall capital expenditures for 2008 were "a little over $17 billion," according to CTO Dick Lynch, and the company is expecting to spend around the same this year. (See MWC 2009: Verizon Picks LTE Vendors.)

"Recognize that's not all in the frontend," Elby said about the capex numbers. "We just don't talk about the other spend as much -- it's not the sexy stuff."

— Dan Jones, Site Editor, Unstrung

DillonO 12/5/2012 | 4:04:10 PM
re: Verizon: Optical Equals Cheaper LTE

The Samsung Alias 2 is a hotly anticipated new cell phone.  The Samsung Alias 2 features a full QWERTY (standard) keypad, and it's a standard clamshell (or flip) phone.  It looks just like any other normal cell phone on the market.  It's unique in that it uses E-Ink technology.  When you open the phone normally, it looks like a normal phone, but when the screen is rotated sideways, the keypad becomes a full keyboard, micro style.  It's carried by Verizon wireless, and it costs about as much as a small instant payday loan – about $130 with a 2 year contract.  Customers looking for a full keypad won't need debt relief if they get the Samsung Alias 2.

spc_isdnip 12/5/2012 | 4:04:08 PM
re: Verizon: Optical Equals Cheaper LTE

In the United States, cellular operators cannot get fiber access to the vast majority of cell sites.  While a handful of cells may be on big buildings or at sites served by competitive fiber providers (who are rarer and rarer), the majority can only be reached via the Incumbent LEC.  That's done off of the Special Access tariff, which is priced many times the actual cost, and is a huge cash cow.

These ILECs do not provide dark fiber.  It's simply not part of the Special Access offering at all.  They have DS1 and DS3, full stop.  Anything else is off-tariff, priced on "incremental willingness to pay".  And dark fiber is rarely offered at any price.

So Verizon Core can sell Verizon Wireless dark fiber, but no other wireless can have it.  Or maybe Verizon and ATT can continue their pas-de-deux and supply each other, to the mutual exclusion of Sprint, T-Mobile, Metro, and others.  But what the speaker here is really doing is showing off the fruits of vertical integration and deregulation of the incumbents, and how they are able to flagrantly abuse their wireline monopolies to harm wireless competitors.


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