Verizon to launch VoLTE in Q4, but delays first LTE-only phones to 2016
Verizon Wireless (NYSE: VZ) intends to launch Voice over LTE service in the fourth quarter of this year, and the carrier plans to use the technology to introduce new, high-definition telepresence services, according to Verizon Communications CFO Fran Shammo.
However, Shammo significantly pushed out the timetable for when Verizon will launch phones that are LTE-only, without support for CDMA voice technology. Speaking at the Oppenheimer Technology, Internet & Communications Conference, the Verizon executive said that Verizon will deploy phones without CDMA chipsets in the first half of 2016. Previously, Shammo indicated Verizon would launch its first phone like that by the end of 2014.
It's not clear what the cause of the delay is, but it could relate to Verizon's oft-stated concern that its VoLTE service needs to be just as reliable as its CDMA voice network. By removing CDMA chipsets Verizon could lower the cost of its phones. Verizon's voice traffic currently travels over its CDMA network, but the carrier is moving that voice traffic to its LTE network with VoLTE.
Verizon executives reiterated this spring that the carrier plans to launch VoLTE sometime this year on a nationwide basis. The carrier said that when it launches the service, it will offer a "robust line" of VoLTE-capable smartphones and video calling services.
As for Verizon's competitors, T-Mobile US (NYSE:TMUS) recently said it now has 200 million POPs covered with Voice over LTE technology on it network, though it doesn't sell many VoLTE-capable phones. AT&T Mobility (NYSE: T) has launched VoLTE in some markets in the Midwest. Sprint (NYSE: S) for its part has not yet given a timetable for when it will launch VoLTE, though there are rumors it may do so in the first half of 2015.
Shammo said VoLTE "doesn't create a lot of incremental benefit" but that it does open up "many new doors for many technologies to launch on that platform." He said those include HD telepresence services including "really quality telemedicine" other services. Shammo also noted that VoLTE will enable HD video calling that can run across different devices and smartphone platforms.
"For us, when we launch a new technology, we have to make sure our quality is strong because the CDMA network was so strong," Shammo said. "We don't go before we know it's ready."
In terms of other network-related issues, Shammo noted Verizon has deployed its AWS spectrum to augment capacity on its LTE network in most of the major cities across the country, and he said the carrier will be done with its AWS overlay by the end of the year. He said that 55 percent of Verizon's customer base uses LTE devices, but that LTE traffic now accounts for 79 percent of the company's total wireless data traffic.
In terms of Verizon's adoption of LTE Multicast technology, the company's term for LTE Broadcast technology, Shammo said that the deployment of that is still "about a year out." He said the carrier will start to embed chips into its phones that can support the technology in the fourth quarter of this year but that it will take time to seed the device base with Multicast-capable phones.
Based upon evolved Multimedia Broadcast Multicast Service (eMBMS) and available commercially beginning with 3GPP Release 9, LTE Broadcast replaces clunky unicast content delivery with a single-frequency network broadcast mode that can send the same content to mass audiences within a specific area. Shammo said LTE Multicast is a "pivotal" technology "that starts to change the way content is delivered over a mobile handset."
Shammo also noted Verizon still has 42 million subscribers on 3G smartphones or feature phones that it can convert to LTE devices over time, which likely would mean more revenue for the carrier. He said Verizon is always trying to stay 18-24 months ahead of where the carrier thinks data demand will be. To that end, he said he does not expect Verizon to lower its capital expenditures for its wireless network, and that this year and into the future Verizon will focus on deploying small cells, Distributed Antenna Systems and other in-building coverage enhancements to improve its LTE network.
Interestingly, Shammo said Verizon could start refarming "slivers" of its 1900 MHz PCS spectrum, which it uses for CDMA service, over the next two to three years as it needs more capacity. He also said Verizon plans to take part in the FCC's AWS-3 auction scheduled to start in November.
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