Verizon's Shammo: We'll finish LTE buildout by mid-2013
Verizon Wireless (NYSE:VZ) will finish its LTE deployment by the middle of 2013, according to Verizon Communications CFO Fran Shammo. The timeline is about six months earlier than Verizon has previously stated. Executives had said the company would match its 3G CDMA footprint with LTE coverage by the end of 2013.
Shammo made the comments today at the Wells Fargo Securities Technology, Media & Telecom Conference when he was discussing the carrier's LTE network, the largest of any U.S. carrier. Shammo touched on numerous topics during his appearance, including regulation, spectrum, industry consolidation and Verizon's newfound support for Microsoft's (NASDAQ:MSFT) Windows Phone 8 platform.
Shammo said after some early hiccups (Verizon's LTE network had four major service disruptions in 2011), the LTE network is stable and reliable. "You can see that people are massively migrating to that network," he said. The company ended the third quarter with 14.9 million postpaid LTE devices on its network. Around 35 percent of the carrier's overall data traffic traveled over its LTE network at the end of September.
Verizon's LTE network now covers 250 million people, or around 80 percent of the U.S. population, and the carrier has a goal of expanding that to at least 260 million POPs by the end of 2012. Competitor AT&T Mobility (NYSE:T) plans to cover 150 million POPs with LTE by year-end and 250 million people by the end of 2013, and AT&T said Wednesday it will expand its LTE network to 300 million covered POPs by the end of 2014.
Shammo said that adoption of the company's Share Everything shared data plans is running higher than the company expected, with more than 13 percent of Verizon's customer base on the new plans. New customers are forced to sign up for the plans and existing customers who upgrade their phones must migrate to a Shared Everything plan to get a subsidized device. Shammo said some customers have paid the full cost of their device to keep their unlimited plans. He said that the average number of devices on shared plans is higher than 2.6 devices per account across Verizon's total postpaid base.
In terms of industry consolidation, Shammo said it was unlikely that Verizon will try and merge with a smaller competitor because it is unlikely to be approved by regulators. However, he said that Softbank's plan to purchase 70 percent of Sprint Nextel (NYSE:S) will strengthen Sprint, and that is positive for the overall industry.
On spectrum, Shammo said now that Verizon's $3.9 billion deal to buy nationwide AWS spectrum from a group of cable companies has been approved, is company has plenty of spectrum for the next five years. He declined to say when Verizon will begin deploying AWS spectrum for LTE, though he noted that the spectrum will be used to add network capacity. He also said Verizon will continue to be opportunistic about buying more spectrum. And while he spoke positively of the FCC's decision to revisit its rules for how much spectrum a carrier can hold, he said the agency should not be picking winners and losers when it comes to acquiring spectrum.
Finally, in terms of smartphone competition, Shammo noted that he has said many times there needs to be a strong third smartphone platform to battle Apple and Google's (NASDAQ:GOOG) Android. "When you have competition then the innovation just elevates itself. I would love to see the Windows [Phone] 8 platform be a successful platform."
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