Verizon LTE to focus first on business users

LTE smartphones coming in '11, but consumer data usage could be a concern

Verizon Wireless will launch its faster Long Term Evolution (LTE) wireless network in 38 cities reaching 110 million people on Sunday, with an initial focus on business users who deploy LTE over new $100 USB modems connected to laptops.

What's less clear is when actual smartphones will be sold by Verizon that are ready for advertised LTE download speeds of 5Mbit/sec. to 12 Mbit/sec. That speed is about 10 times faster than what Verizon currently offers.

Verizon CEO Ivan Seidenberg recently said LTE smartphones will be launched by February, while Verizon CTO Tony Melone today said they would be ready by mid-2011, although he added that his timeline should not be taken as "any different" from Seidenberg's. More information on devices and release dates will be announced at next month's Consumer Electronics Show, Melone said.

The emergence of LTE smartphones will be important for Verizon's early success with LTE. Sprint Nextel's wireless WiMax network running over the Clearwire network supports two WiMax smartphones that function in 68 cities already, as well as laptop modems and other devices. Sprint puts its average download speeds with WiMax at 3Mbit/sec. to 5 Mbit/sec.

While business users and consumers will be able to buy the first USB modems for Verizon's LTE network on Dec. 5, Verizon seems more focused on laptop-centric business users in its marketing.

Dan Hays, a telecommunications consultant for PRTM in Washington, said LTE will be "very compelling for businesses" especially with the emergence of data-heavy applications such as video chat over wireless.

The first modem to be sold by Verizon will be an LG VL600, selling for $99.99 after a $50 rebate and a two-year contract. The LG modem will be followed by the Pantech UML290 soon, Melone said.

The modems and other devices will be sold with two-year plans that run $50 for 5GB of data per month and $80 for 10GB monthly. Both plans are not capped, Melone said, and users will receive four online updates about how much data they are using. Any overage will cost $10 per 1GB.

Melone called the two plans a way of reaching the broadest possible audience of business and consumer users. With LTE, a 10MB business presentation could be downloaded wirelessly in less than 10 seconds, Verizon officials said. That would be about 10 times faster than now.

Starting with USB modems that focus on business users will be a "safe way" for Verizon to launch the network, Hays said, since data usage could be very high -- especially with consumers on smartphones who stream audio and video. "There will be a large pent-up demand for smartphones on this network, and we expect Verizon will launch LTE smartphones building on the success of its Droid phones running Android," he said.

If some European LTE providers are a guide, LTE data usage in the U.S. could easily reach 15 GB a month per user, Hays said. That would cost $130 a month for those using Verizon's $80-a-month plan.

Jack Gold, an analyst at J. Gold Associates, said that starting with USB modems, as Sprint did with WiMax, makes sense because it will be harder to get a critical mass of phone users right away. That's because phone users are probably locked into two-year contracts and need to wait until the end of their contract to upgrade.

Melone said that Verizon has built the LTE network from the ground up to go live in all 38 cities at one time. He said the new network "will not [have] a hiccup" as a user travels between LTE 4G and CDMA 3G. Some users experienced problems when moving between networks during earlier WiMax rollouts.

There is a bit of a catch, however: data connection hand-off should go smoothly from LTE to CDMA, he said, but a user will have to stop transmitting data briefly when going from CDMA to LTE while the modem finds the faster network.

Melone also said that the LTE network won't support Voice over IP (VoIP) calls initially and may not do so until about 2012. During that initial period, most voice traffic will revert to the CDMA network, running alongside an LTE data transmission from a Web connection, for example, where LTE is available. There may be some VoIP functions embedded inside games that will work over LTE initially, however.

With voice on a separate CDMA channel, users will apparently continue to pay separately for a voice plan, once smartphones are launched.

One reporter took Melone, Verizon and other carriers to task for calling LTE a 4G network, when the ITU has said that only mobile networks over 100 MBit/sec should be designated as 4G. But Melone responded: "That's the IT version [of 4G]. Whether we call it 4G or something else, it is a quantum general step-up.... 4G has been used widely for the last several years, and, quite frankly, it is what it is."

Verizon Wireless spokesman Jeffrey Nelson added: "Whether you call [the LTE network] 4G or chicken soup, we launch it on Sunday."

Verizon is launching the LTE network in 38 cities and 60 airports, with a big emphasis on 20 million customers in southern California as well as the entire Interstate-95 corridor from Washington D.C. to Boston, Melone said.

The following is the complete list of the 38 markets: Akron, Ohio; Athens, Ga.; Atlanta; Baltimore; Boston; Charlotte, N.C.; Chicago; Cincinnati, Cleveland and Columbus, Ohio; Dallas-Ft. Worth; Denver; Ft. Lauderdale; Houston; Jacksonville, Fla.; Las Vegas; Los Angeles; Miami; Minneapolis/Saint Paul; Nashville; New Orleans; New York; oakland, calif.; Oklahoma City; Orlando; Philadelphia; Phoenix; Pittsburgh; Rochester, N.Y.; San Antonio; San Diego; San Francisco; San Jose; Seattle/Tacoma; St. Louis; Tampa, Fla. Washington, D.C.; West Lafayette, Ind.; and West Palm beach, Fla.

Keith Shaw shows off the LG VL600 USB data modem, which can access Verizon Wireless' new 4G LTE wireless network. In speed tests, he was able to achieve about 6-8Mbps of download speed, and almost the same (5-7Mbps) of upload speeds.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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