Verizon expects 6 rural LTE carrier partners to launch by year-end

Verizon Wireless (NYSE:VZ) expects a total of six of its rural LTE program partners to offer commercial service by the end of the year, according to a Verizon executive. So far two operators have already launched service.

In an interview with FierceWireless, Verizon's Philip Junker said the carrier expects to add more rural carrier members in the months ahead. "We have many carriers in the pipeline," said Junker, Verizon's executive director of strategic alliances. "We expect to sign more carriers up."

Junker, the head of Verizon's LTE in Rural America program, will preside over a summit for the program's 17 carrier partners in Waltham, Mass., on Wednesday and Thursday. Verizon's LTE Innovation Center is located there and the summit will include a tour of the facility, details on how the carriers can take advantage of it and sessions in which the carriers can provide feedback to Verizon.

Verizon announced its LRA initiative in June 2010. Under the program, Verizon shares access to its 700 MHz Upper C Block spectrum with rural operators, who use their tower and backhaul assets to build an LTE network and market the LTE service under their own brands. Earlier this spring Oklahoma-based Pioneer Cellular and Wisconsin-based Cellcom became the first two carriers to launch commercial service under the program. Junker said Verizon expects four more by year-end, though he declined to name them.

Junker said that the program allows Verizon to have rural areas without the need for direct investment. The 17 carriers in the program cover 2.7 million POPs over 144,000 square-miles, for a density of 19 people covered per square mile. (The FCC defines rural areas as geographic areas with population densities of 100 people or fewer per square mile.)

The operators in the program include: Bluegrass Cellular; Cross Telephone; Pioneer Cellular; Cellcom; Thumb Cellular; Strata Networks; S and R Communications; Carolina West; Custer Telephone Cooperative; Convergence Technologies; Chariton Valley Communication Corporation; Appalachian Wireless; Northwest Missouri Cellular; Chat Mobility; Matanuska Telephone Association; Sagebrush Cellular; and Copper Valley Telecom.

Once a carrier signs up with the program, Verizon and the operator collaborate on a buildout plan for the territory to be covered. Junker said Verizon and the carriers do rigorous testing and work through backhaul issues, ensuring that customers can be provisioned properly on Verizon's all-IP network. All of the carriers need to connect to Verizon's core network, so Verizon needs to make sure that the proper security is in place. Junker said there are "hundreds" of people across Verizon working on the LRA program. The team dedicated to the program is based in Little Rock, Ark., where Alltel used to be based. 

Junker said Verizon is working out the kinks in the program and is making it smoother. 

Two of the carriers in the program--Cellcom and Appalachian Wireless--said last week that they will launch Apple's (NASDAQ:AAPL) LTE-capable iPhone 5 Sept. 28. Junker said any carrier in the program that can certify that the devices meet Verizon's standards for LTE can provision those devices. However, he noted that the carriers have to purchase the devices themselves.

As Verizon's LTE coverage expands--the carriers covers around 235 million POPs now and plans to expand to 260 million by the end of the year--Junker conceded that the number of partners added to the rural program may slow down. In order to participate, carriers need to operate in areas "substantially" outside of Verizon's LTE footprint. "As we add more participants we're eating into that part of the country" where Verizon does not offer service, he said.

Despite the close ties Verizon is forging with rural carriers, there is still a great deal of tension between smaller carriers and Verizon and AT&T Mobility (NYSE:T). The Rural Cellular Association recently rebranded itself as the Competitive Carriers Association to better reflect its membership and role in the industry. The CCA now supports the interests of operators with fewer than 80 million subscribers--only Verizon and AT&T have more than 80 million customers.

Additionally, tensions continue to flare between AT&T and smaller carriers demanding Lower 700 MHz interoperability to better enable nationwide roaming and broader device availability. AT&T continues to insist that such a requirement is unnecessary and ignores the fact that CCA members could be seeking seamless coverage across the LTE deployments of Sprint Nextel (NYSE:S), T-Mobile USA and A-Block carriers instead of demanding interoperability with AT&T.

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