Verizon aims to keep LTE premium service as long as possible

Is it me or do you get the feeling that Verizon Wireless (NYSE:VZ) doesn't want a heck of a lot of users coming onto its LTE network?

Ever since the operator launched LTE on Sunday in 38 markets, I have seen absolutely no marketing here in Denver. I thought for sure there would be an insert or a big full-page ad in Sunday's paper declaring that blazing-fast mobile broadband is here--but, nada.

Maybe it's because there are just two USB LTE modems available and no sexy smartphones. After all, it is the Christmas selling season, and smartphones are always the hot item.

Moreover, comments from Verizon Communications CEO Ivan Seidenberg (see related story) this week at the UBS Global Media and Communications Conference make it clear that LTE service will be positioned as a premium service as long as possible.

He said LTE will be a modest substitute for cable Internet services while warning against lowering prices too quickly in the still-nascent market for 4G services. "We have to hold firm as best we can until the entire environment is mature enough where we have devices and services so that people can see the value," he said. 

While Verizon is pricing its $50/5GB plan $10 cheaper than its 3G plan, the $80/10GB plan is no doubt where it would like to see subscriber uptake. Seidenberg said his company's current higher-end data plan could serve as a template for future smartphone offerings.  

During a conference call last week, Verizon Wireless CTO Tony Melone explained that the company believes a significant number of customers will embrace LTE and find that a 5GB plan won't be enough and, so, instead they will gravitate to the $80 per month plan. But at the same time, for those who want to try the LTE network, the $50 plan will give them a less-expensive option to sample it.

So I guess the main question is: Will consumers be willing to pay a rather large premium on blazing fast mobile broadband services when the services aren't positioned as a wired replacement? We shall soon see.--Lynnette

Suggested Articles

A new report by Chetan Sharma Consulting projects the edge internet economy will be worth over $4.1 trillion by 2030, propelled in part by the densification…

Bluegrass Cellular is asking the FCC for permission to extend its Citizens Broadband Radio Services (CBRS) tests for another two years.

In their latest round of comments to the FCC, both users and would-be users of the C-Band argued whether fiber is the best alternative for delivering the types…