Verizon Wireless (NYSE:VZ) executives believe that the company's large LTE network footprint will give it a competitive advantage when it comes to selling Apple's (NASDAQ:AAPL) iPhone 5, which supports LTE.
Apple debuted the device Wednesday and said it will be available in the U.S. through Verizon, AT&T Mobility (NYSE:T) and Sprint Nextel (NYSE:S). Speaking at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference, Verizon Communications EVP and CFO Fran Shammo said that the company believes that because it has "double the LTE coverage of all its competitors combined" it will have an advantage. "We are in a good spot. Apple is a good partner, and I think we will do extremely well with the phone," Shammo said.
Verizon's LTE network currently covers 75 percent of the U.S. population, around 235 million POPs, and the carrier plans to hit 260 million POPs by year-end. AT&T's LTE network covers more than 75 million POPs, and the carrier plans to expand that to 150 million POPs by year-end. Meanwhile, Sprint Nextel just turned on its LTE network in July in a handful of markets, but the carrier hopes to cover 123 million POPs by year-end.
Shammo added that the company expects to see strong demand for the iPhone 5 in third quarter but noted that the third quarter is a short selling period. Apple said pre-orders for the iPhone 5 will start Sept. 14 with the gadget going on sale Sept. 21 in the United States. However, he does expect the company to have a very strong fourth quarter based upon sales of the iPhone 5 and other devices that are in the works.
Shammo also reported that the company's Share Everything shared data plan, which debuted in June, is doing better than the company expected. "The migration off of the unlimited 3G plans to the Share Everything plan on 4G is more than expected at this point in time," Shammo said. "So far the plan has exceeded expectations." He added that more customers have also been attaching more devices to the shared data plans than the company predicted. Those devices include MiFi hot spots and tablets.
Shammo's comments are notable considering a recent Parks Associates research report found that many consumers are confused about shared data plans' fees and still prefer unlimited data. Verizon and AT&T "run the risk of substantially increasing their churn rate at the same time that Sprint and T-Mobile are marketing their unlimited data plans, which are still the most popular data plans on market," said Jennifer Kent, Parks research analyst with Parks Associates.
Shammo also said that the company will be looking at new metrics to use because the shared data plans make it difficult to attach revenue per every user. Instead, he said that Verizon is looking at metrics such as average revenue per account.
Interestingly Shammo also confirmed that the company will launch VoLTE in 2013 rather than late 2012, which Verizon executives have been saying for some time now. However, he did not provide further details. In May, Tony Melone, CTO of Verizon Communications said that the company would enable VoLTE in 2012 but would not rush the service.
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