NASHVILLE--Verizon Wireless CTO Tony Melone said that as Verizon and other carriers push ahead with 4G deployments, it will be critical for carriers, infrastructure providers and other players in the value chain to strike a balance in collaborating with each other.
Delivering the opening keynote address at the PCIA Wireless Infrastructure show here, Melone said that there will be winners and losers in all pieces of the value chain, "but the links in the chain must all be strong for true success."
"In my opinion, the winners will be those that one, have sound fundamentals; two, stick to their core competencies within the value chain; and three, execute," he said. "The winners will also be the companies that understand this necessity of partnership and collaboration within the value chain."
Melone said that as Verizon continues to move toward its plan of launching 25 to 30 commercial LTE markets by the end of 2010, and matching its current 3G footprint with LTE by the end of 2013, it will be focusing on two key components: antennas and backhaul.
He delivered something of a warning to antenna providers. The message was: Let's get in sync now. Since Verizon will use 700 MHz spectrum for LTE, he said, that will drive Verizon to add or change tower-top antennas.
"The impact of adding vs. changing antennas to our monthly tower rent plays a big role in what options I have," he said. "If this part of the value chain gets out of whack, we will look for alternatives, and some of you may lose incremental revenue. So this is a great example of the importance of a well balanced ecosystem."
Melone also said Verizon has two options for backhaul: Ethernet over fiber or Ethernet over microwave. "Quite frankly, I like both," he said. Melone said Phase 1 of Verizon's LTE rollout will rely mostly on fiber for backhaul. "So for those of you who like to see that play out differently, you have work to do to enhance the value proposition for the carriers," he said.
"So generally, if fiber is available, it's the better alternative," he said in an interview with FierceWireless after the speech. "And it's more scalable. But microwave has come a long way in terms of scalability."
He also laid out several other important principles for Verizon's LTE network:
- The need to have back-up power throughout, especially to support third-party backhaul electronics.
- Distributed antenna systems for high volume areas like airports and arenas.
- The need for 4G picocells and femtocells to enhance coverage and boost capacity in hotspots.
In the interview, Melone also discussed LTE device makers. "Device manufacturers need to understand that the market is very competitive," he said. "So what the carriers can afford to spend to buy those devices, because we in turn have to subsidize them, there needs to be a balance there. And quite frankly, Apple's done a very nice job on that with AT&T."
As for Verizon's buildout, Melone offered a long view: "These tower companies, if they go bankrupt because the business model is such that I expect them to keep doing more and more for me at no incremental revenue for them, that's not realistic," he said. "So I shouldn't be using my power of being on 30,000 of their sites to dictate terms that are unreasonable and bully them into something that long term, will have a negative impact on that. And you keep carrying that forward."
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