Verizon's Small: We have close to 4M VoLTE customers

Verizon Wireless (NYSE: VZ) has nearly 4 million customers using its Voice over LTE service, which it launched in September 2014 according to a senior Verizon executive. Although a tiny fraction of the 103.7 million total retail postpaid connections Verizon had at the end of the second quarter, it is the first time Verizon has disclosed how widely VoLTE has been adopted on its network.


Verizon Wireless COO David Small disclosed the figures during an appearance at the Oppenheimer Technology, Internet & Communications Conference and said that Verizon is pleased with the VoLTE performance it has seen so far. He said that Verizon has system performance engineers monitoring VoLTE performance on a daily basis. Verizon's VoLTE network achieved a similar dropped call rate as its legacy CDMA voice network in half the time it took for the legacy voice network to get to those rates.

Small said that VoLTE customers are not calling into customer care at a higher rate than non-VoLTE customers and that customers value the HD Voice experience they can achieve if both customers at the ends of a call have phones that can take advantage of the technology. Currently, Verizon has 22 smartphones that can support VoLTE.

Small added that Verizon is "going through a natural evolution" with VoLTE and will continue to offer it as a feature customers can opt into and turn on and off. "At some point we will migrate to an out-of-the-box, 'default on' position," he said, adding that "we are working that aggressively."

The next phase would occur when Verizon feels its VoLTE call quality performance is such that it can take CDMA radios out of devices. Small did not give a target for when Verizon might do that. In the meantime, he said, Verizon has been able to negotiate lower prices with OEMs for putting CDMA chipsets into phones.  

Verizon and T-Mobile US (NYSE:TMUS) offer VoLTE nationwide, while AT&T Mobility (NYSE: T) is still rolling it out market by market and offers VoLTE in all or part of 29 states. U.S. Cellular (NYSE:USM) is planning three VoLTE trial markets for launch later this year, though customers will not be able to sign up for the service. Sprint (NYSE: S) has said it will eventually launch VoLTE but has not given a timeframe for doing so.

A T-Mobile spokesman said T-Mobile had 8.4 million VoLTE customers as of July, up from 2 million at the start of 2015. An AT&T spokeswoman did not immediately have a comment on how many VoLTE customers the carrier has. 

Small, who used to be Verizon Wireless' CTO, discussed the company's network plans as well as its new data pricing. Small noted that Verizon has started to refarm some of its 1900 MHz PCS spectrum "in various parts of the country and will continue to do that." He also said "over time" Verizon will also refarm its 850 MHz spectrum, which is uses for CDMA voice. That will likely happen as more customers use VoLTE, but with only 4 million customers using VoLTE now, that migration will likely take some time.

Verizon will also in the next few years deploy the AWS-3 spectrum it won at auction earlier this year. "From my vantage point, we have very strong depth of high-quality spectrum," he said. Verizon will continue to deploy small cells, in-building solutions and Distributed Antenna Systems to add "pockets of capacity where you need it."

The goal, Small said, is to ensure that Verizon's LTE customers have a consistent experience of 5-12 Mbps downlink speeds while on LTE, and that if that ever starts dropping below that threshold, Verizon will invest where it needs to.

Small also touched on Verizon's new data plans, which will take effect on Thursday for new customers and existing customers who want to switch to them. The plans cut data pricing on some shared data buckets but could also raise smartphone access charges by $5 per month per line for customers who had been on equipment installment plans and shared data plans with buckets of 6 GB or more.

"In some cases it's a little bit lower, in other cases it's a little bit higher but we think it will drive consumer demand," from both new and existing customers, Small said. He said that as customers use more data, the cost per GB drops and it also becomes more financially lucrative for Verizon.

For millennials who are still on family data plans, Small said that under the carrier's old plans the company's research showed that millennials felt like when they used too much data and parents got alerts, "they told us that Verizon was telling on them" about their data consumption. The new plans--which come in buckets of 1, 3, 6 and 12 GB--will more closely align to individuals' and families' data usage.

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