UPDATED 15:37 EDT / JULY 19 2011

Verizon Driving Wireless Technology Development, Targets Rival AT&T

Verizon Wireless is launching 4G LTE network in 28 additional markets this week, ahead from its competitors AT&T, Sprint and T-Mobile, expanding its network to 102 cities in the US. Consumers can choose a variety of 4G devices including smartphones, tablet, hotspots, and USB modems to use the blazing fast speeds of 4G LTE network.

The 4G network provides wireless access up to 10 times faster than the 3G services. Verizon says consumer will get average downlink speed of 12 megabits per second and uplink of 2 to 5 megabits per second.

“On Thursday, when we light up 28 additional 4G LTE markets, we will offer consumers and businesses in 102 metropolitan areas the most advanced 4G wireless network on the planet, while continuing to offer the nation’s most reliable 3G network coast to coast,” said David Small, chief technical officer of Verizon Wireless.

“In fewer than eight months we have introduced our 4G LTE network to more than 100 markets and we are continuing to aggressively expand our 4G LTE network; by the end of 2013 we plan to bring 4G LTE mobile broadband to our entire 3G coverage area.”

Verizon is expecting to add 930,000 more net subscribers by the second quarter, while AT&T is expecting to add 91,000 new subscribers.  Sprint, on the other hand, is expected to lose nearly 15,000 contract customers. Verizon’s subscription growth rate in second quarter will surpass its arch rival AT&T, taking aim at the number one spot upon unveiling its latest second quarter earnings on Friday, July 22, 2011.

While fast data speeds is an integral aspect of Verizon’s long-term solutions, mobile wallets is another potential for amassing revenues.  The carrier has teamed up with the major financial services providers including Visa, MasterCard, Discover and American Express, which are joining Verizon’s Isis project. The mobile commerce solution venture by Verizon Wireless, AT&T and T-Mobile USA will allow customers to conduct point-of-sale transactions, redeem coupons and use store merchant loyalty cards via a consumer’s mobile device. This will boost the revenue of these firms, especially Verizon.

Analysts are forecasting $27.43 billion in revenue for Verizon this quarter, a rise of 2.5% from a year ago. In the last quarter, Verizon reported profit of 51 cents per share against a mean estimate of net income at 50 cents per share. The strong growth is “due to solid iPhone sales as well as LTE handsets selling well,” Mizuho analyst Michael Nelson said. The next generation of iPhones is due out next quarter, and Verizon’s higher subsidy to sell iPhones over other devices could jeopardize its margin in next quarters to come. Analysts predicts Verizon’s wireless service profit margin to fall to 44.7 percent in the second quarter compared to 47.5 percent a year earlier.

AT&T, which was the exclusive player to sell iPhone till some time back, will lose about 100,000 customers in the second quarter, according to a report published by Nelson. But the US mobile provider would come strong if it gets the regulatory approval to acquire T-Mobile USA at an estimated $39 billion transaction. The deal will make it top dog, surpassing Verizon Wireless in customer numbers.  Some analysts are predicting Apple may go with Sprint Nextel and T-Mobile for their next version of iPhone, further expanding its seller options.  This would put more burdens on Verizon to appeal new iPhone customers, and affect their margins in the long run.


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