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Verizon Communications Inc. (VZ) Is Done With LTE

The race among U.S. wireless carriers to deploy 4G LTE networks has never been close: Verizon Communications Inc. (NYSE:VZ) Wireless has always led the way by a large margin. One of Verizon’s biggest strategic strengths has been its firm commitment to the technology and its rapid rollout, which started in December 2010. Verizon Communications Inc. (NYSE:VZ) was the first carrier to begin offering LTE service.

Verizon Communications Inc. (NYSE:VZ)

Big Red is now effectively done with its LTE rollout, saying it now has service in 500 markets. The carrier says that 99% of its 3G coverage footprint now has LTE coverage, and 57% of all data on its network is being transmitted with 4G LTE.

Source: Verizon Wireless.

In comparison, primary rival AT&T Inc. (NYSE:T) has 4G LTE in just 284 markets currently, although Ma Bell markets its HSPA+ network as “4G” as well. Much like in the 3G race, Verizon Communications Inc. (NYSE:VZ) positions its network as the “largest” while AT&T touts its as the “fastest.” Just last month, PCWorld and TechHive declared AT&T Inc. (NYSE:T)’s LTE network the fastest in the U.S., based on tests in 20 markets.

The next step is for Verizon to roll out Voice-over-LTE, or VoLTE. The VoLTE deployment has been a long time coming and seen numerous delays. Verizon Communications Inc. (NYSE:VZ) had initially planned commercial deployment of VoLTE in 2012, which was subsequently pushed back to 2013, and then again to 2014. The company confirmed today that VoLTE wouldn’t launch until early 2014.

Those delays had hurt network equipment suppliers like Acme Packet, which was later acquired by Oracle Corporation (NASDAQ:ORCL) for $1.7 billion.

The transition to VoLTE is important for Verizon because it will allow the carrier to begin phasing out its older 3G CDMA network and focus solely on LTE, although these types of transitions take many years. Verizon is targeting 2012 as when it hopes to retire its 2G and 3G networks. Verizon’s LTE network currently only supports data, and adding voice to the mix is a necessary next step. VoLTE will also allow subscribers to talk and use data simultaneously, removing an advantage that AT&T has long enjoyed.

Once VoLTE is available, Verizon Communications Inc. (NYSE:VZ) can offer LTE-only devices that don’t require as many cellular radios, simplifying their design and reducing costs. In March, CFO Fran Shammo had mentioned that removing the CDMA chip would help reduce subsidies. These LTE-only phones should start hitting the market by late 2014. The carrier is also about to start refarming its PCS spectrum for LTE in order to beef up capacity by 2015.

Since AT&T Inc. (NYSE:T)’s “4G” network includes both HSPA+ and LTE, Ma Bell needs to continue building up its LTE coverage before it can even consider moving to LTE-only devices.

In the race for 4G LTE, the first to start was the first to finish.

Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It’s not Nokia Corporation (ADR) (NYSE:NOK)… or Verizon Communications Inc. (NYSE:VZ)… or even Apple Inc. (NASDAQ:AAPL)! In fact, you’ve probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war.

The article Verizon Is Done With LTE originally appeared on and is written by Evan Niu, CFA.

Fool contributor Evan Niu, CFA, owns shares of Apple and Verizon Communications (NYSE:VZ). The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Oracle.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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