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For immediate release
Chicago, IL – June 1, 2010 – Zacks.com Analyst Blog Features: Verizon (VZ), AT&T (T), Motorola (AGAINST), Research in motion (RIMM) and Sprint Nextel (S).
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Here are highlights from Friday’s analyst blog:
Verizon confirms 4G LTE pricing
Verizon (VZ) has unveiled its pricing strategy for its 4G Long-Term Evolution (LTE) service which is expected to launch later this year. As expected, Big Red has opted for a tiered (or measured) pricing policy for its LTE data plans.
The tiered pricing structure is in contrast to Verizon’s popular fixed monthly unlimited data plans for its 3G services. Under metered data plans, tariffs will be levied on the basis of data consumption, which could discourage customers from using huge volumes of data.
Since customers will connect multiple devices (five or more) to the LTE network, data services will be offered in “buckets” of data (by megabytes) with different associated charges. The positive side of this policy is that customers who use less data volume have to pay significantly less than those who use their smartphones to access high bandwidth applications (like streaming HD video or downloading huge files from data).
In essence, customers using more data on the 4G LTE network may experience a billing shock, especially if they exceed the allotted monthly data limit, given the overage charges.
Verizon has successfully completed field tests of its LTE network in Boston and Seattle, showing encouraging throughput levels. The carrier has used its coveted 700 megahertz (MHz) spectrum for 4G data transfer to successfully test applications such as web browsing, voice transmission, video streaming, and file upload and download.
The LTE network is expected to offer average downlink speeds of 5 to 12 megabits per second (Mbps) in a practical setting. Based on a recent test run on laptops at a small Boston pizza restaurant, the network achieved downlink speeds of 8.55 Mbps.
Verizon plans to commercially launch its 4G LTE services in late 2010 in 25 to 30 markets (covering 100 million subscribers), before archiving AT&T (T) scheduled launch of the LTE network in 2011. The operator said the cost of transmitting a megabyte of data on its LTE network would be half to a third of the cost of transmitting the same data on its 3G network.
Verizon recently hinted that it could roll out 4G handsets in May 2011, ahead of its mid-2011 forecast. The carrier plans to showcase the handsets at the Consumer Electronics Show (CES) in January 2011.
At least five handsets from major suppliers such as Motorola (AGAINST), Research in motion (RIMM), HTC and LG are expected to be released by Verizon, capable of operating on the LTE network. However, the first devices to access the LTE network will be data cards and laptop modems which will be introduced at the end of 2010.
Verizon’s new pricing strategy signals a paradigm shift in wireless pricing structure. The AT&T carrier archives and Sprint Nextel (S) are also supporters of the tiered pricing system. Thus, the days of unlimited data plans are effectively numbered.
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