Verizon to roll out LTE in two U.S. cities this year

Verizon Wireless will debut 4G network in late '09, expand it to 25 or more cities next year

Verizon Wireless announced Wednesday that it will start to roll out a network based on Long Term Evolution (LTE) technology in two U.S. cities late this year and then launch the network commercially and expand it to 25 to 30 markets in 2010.

The LTE network will be built using equipment from Alcatel-Lucent and LM Ericsson Telephone Co., according to Verizon Wireless, which said in December that it expected to begin deploying the fourth-generation wireless technology before the end of this year.

Trial runs of LTE conducted by Verizon Wireless in the U.S. and with part-owner Vodafone Group PLC in Europe have shown download speeds of up to 80Mbit/sec., according to Dick Lynch, executive vice president and chief technology officer at majority owner Verizon Communications Inc.

But what matters most is the average speed, and that is not yet known, he said today at the GSMA Mobile World Congress in Barcelona. "We won't know what the real average speed is until we have a network deployed, so come talk to me at the end of December," Lynch added.

He predicted that the first LTE customers will be laptop users, who he said will see speed improvements and reduced latency compared with the performance they get on existing EV-DO (Evolution-Data Optimized) networks.

Lynch said he doesn't expect the first smartphone users to show up on the 4G (fourth-generation) network until mid-2011. "But LTE is really, I think, the opportunity for us as an industry to begin to see all sorts of consumer devices come with embedded wireless capabilities," he said.

For example, digital cameras could have built-in support for LTE. "If I had a camera that was smart enough to monitor the amount of data on my flash card and upload it to my network cloud for storage or upload it to my PC directly, then I would be a very happy photographer," Lynch said.

He added that it will be possible to build support for LTE into lots of different consumer-oriented products because of the expected global scale of the technology's usage. LTE faces competition from WiMax in the 4G market — particularly in the U.S., where Clearwire Corp. is building a nationwide WiMax network with financial backing from Sprint Nextel, Intel, Google and several cable companies. But LTE is the upgrade path of choice for carriers that currently support the dominant GSM mobile standard.

That should convince hardware makers that there is a viable market for mobile devices capable of running on LTE networks, according to Lynch. "Where there is demand, there is volume, and, of course, with volume comes price reductions," he said, adding that he thinks the cost of LTE services will come down to the right level for device makers within two or three years.

Verizon Wireless has yet to decide on pricing for its LTE network, but the cost will be based on usage. "I think the world has to go there, because wireless data is a limited resource," Lynch said. But he noted that some LTE users may end up with a total of "five or six" different devices that they want to run on the network. "So as a result," he said, "I think we'll see some new pricing models that allow us to aggregate multiple devices and price accordingly."

Verizon Wireless will use the 700-MHz spectrum it won in an auction last year to roll out the LTE network in the U.S., with Ericsson and Alcatel-Lucent supplying the required base stations for the network.

Until now, Verizon Wireless has been working with six potential equipment suppliers, and Lynch said they all did quite well. "We felt that in terms of immediate performance — meaning today's performance, as opposed to potential performance in the future — and pricing, the two we selected where the right ones to go with," he added.

Alcatel-Lucent and Ericsson will each get one of the first two markets in the U.S., and Verizon Wireless officials will spend the first few months of next year observing the performance and capabilities of their equipment. Adjustments will then be made to the deals with the two suppliers based on which is best positioned to accelerate the rollout of the LTE network, Lynch said.

Ericsson sees the deal with Verizon Wireless as a potential springboard for future LTE contracts, said Johan Wibergh, senior vice president and head of the telecommunications equipment maker's networks business unit. It's important for suppliers like Ericsson to get a good start in the 4G market, said Wibergh, who added that Verizon Wireless is a new customer for Ericsson.

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