Verizon extends free LTE smartphone hotspot promotion

Verizon Wireless (NYSE:VZ) will lengthen the duration of its free LTE smartphone hotspot promotion beyond May 15, according to research firm Current Analysis, an action likely geared toward encouraging ThunderBolt and Charge smartphone subscribers to get more comfortable with the feature.

Verizon wireless currently offers its LTE smartphone users free, uncapped smartphone tethering (subscribers are required to pay $30 for smartphone data services, but tethering is currently offered for no additional charge). Users can obtain unlimited access to Verizon's LTE network by connecting their laptops or other Wi-Fi devices to their smartphone's hotspot feature.

Verizon recently disclosed that it activated 260,000 HTC ThunderBolt smartphones during its fourth quarter. The carrier sells the ThunderBolt for around $250 with a contract; Verizon recently introduced the Samsung Droid Charge for around $300 with a two-year contract.

"Even if the [LTE hotspot] promotion is short-lived, it still provides a strong incentive for customers to consider upgrading to LTE devices. In addition, once customers experience high LTE data speeds, they will be more likely to continue subscribing to a hotspot tethering service when the promotion ends," wrote Current Analysis' Weston Henderek. Current Analysis predicted that Verizon would continue to offer the promotion for the next few months.

A Verizon representative confirmed the carrier extended the promotion, but did not provide any further details.

How Verizon will handle LTE tethering after the promotion ends is an open question. The carrier currently charges EV-DO smartphone subscribers an extra $30 per month for 2 GB of tethering data. Verizon executives have repeatedly hinted the carrier will implement tiered data plans for smartphone users sometime in the coming months; AT&T Mobility (NYSE:T) last year switched to tiered smartphone data plans.

"If [Verizon] chooses to introduce tiers for data and tethered mobile hotspot plans at the conclusion of its free LTE smartphone mobile hotspot promotion, it could risk upsetting early LTE smartphone adopters and somewhat limiting its momentum in the space," Henderek noted.

Tiered data pricing has become a competitive concern for a number of carriers; indeed, Sprint Nextel (NYSE:S) has used the issue as a fulcrum to separate itself from its larger rivals. Sprint recently embarked on a new ad campaign highlighting its uncapped, unthrottled smartphone data plans.

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