4G – Verizon’s Ace Up the Sleeve?

So, on Dec 1st, Verizon made the long expected announcement that has launched the company headfirst into the 4G LTE world. Dec 5th was the day when Verizon’s 4G LTE network was officially turned on – unleashing the world’s largest 4G network – according to their press release. Check out their glitzy launch video.

Really? The launch of the world’s largest 4G network – with no devices? Hmmm…

Apparently, they are serious. The network initially launches (without any devices) in 38 major metropolitan areas and in more than 60 commercial airports coast to coast – covering around 110 million folks.  But, I am not sure if Verizon is really ready – but their pre-announcement (I call this a pre-announce as they don’t a single 4G LTE subscriber yet) is pure marketing brilliance. With Apple rumored to be creating a 4G iPhone and with AT&T struggling with a number of QoS issues, the time is ripe for the switch. As a slew of 4G devices start to come on line starting from Q1 2011, Verizon will be well positioned to take on subscribers. Further, the 4G ramp will be slow and will not reach its peak until a few more years – so Verizon basically can take advantage of that time they’ll have to expand their service from both an infrastructure and coverage point of view. For the time being, road warriors can subscribe to their service to enable their laptops faster access times to the web.

Other networks that are supposedly 4G compliant in the U.S, viz Sprint-Nextel (it’s actually a Wi-Max roll out), is a smaller player and will be plagued by the lack of suitable devices and Verizon being a much bigger player will command favorable device pricing.

But all is not lost for 3G. Most of the developed world is still on 3G and 2.5G and it will be years before the last of the 3G subscribers move over to 4G. So, AT&T and other carriers can relish that thought. But there is going to be demand diversion to 4G and the most profitable 3G subscribers may very well turn their backs on 3G to take advantage of the much higher wireless bandwidth and low-latencies offered by 4G. So at some point soon, there is going to downward pressure on revenues for all of the 3G carriers. Long story short, they better get their act together hitch their wagons sooner rather than later to the 4G train.

But will the 4G train deliver us to the promised land? 10-12Mb speeds and 30ms low-latencies? What do you think?

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