With its public commitment to LTE last month, Verizon has had a similar effect to Sprint’s on WiMAX a year before, opening the floodgates of interest and confidence in the next generation technology ‘ and as a by-product, putting further pressure on Qualcomm and CDMA. Note the lack of the suffix ‘Wireless’ on the Verizon announcements ‘ not only is the company looking to achieve time to market, increased reach and economies of scale by harmonizing its 4G roadmap with that of joint venture partner Vodafone, but it is also looking for similar advantages ‘ and a headstart on AT&T ‘ by converging its efforts with those of its wireline operations.
Verizon’s CTO Dick Lynch, once among the least hawkish CTOs about a rapid move to 4G, is now talking about the ‘big picture’ of an integration strategy for LTE and the Verizon FiOS broadband network, with an eye to being one of the first telcos to achieve truly seamless, fully broadband convergence. Closer wireline/wireless integration was once a factor in Verizon’s well publicized desire to buy Vodafone out of the wireless venture (though the cellco’s awesome cash generation ability was a more immediate motive) but now, with Vodafone pursuing convergence itself around the world, there could be value in pooling expertise, trials, and global strategic alliances. Given the saturation of Verizon’s core markets, it cannot be long before it starts to develop a serious international game plan again, and Vodafone’s attractiveness as a partner, especially in emerging economies, will be heightened by this.
The 4G network will be the first that truly bridges Verizon’s wireline and wireless businesses, Lynch said. ‘We don’t expect people are going to download high definition video over the LTE network, but there will be other services that tightly integrate with FiOS,’ he told a press conference. ‘One of the reasons I made the move from Verizon Wireless to Verizon is because there is this belief that the future is about the converged network.’ With LTE starting trials next year, and likely to be in mainstream handsets in 2010-11, full convergence is a five-year plan, but Lynch said he was sending a clear signal to the cellphone and consumer electronics industries that they need to commit to development of LTE products, in the near term, and then to devices to bridge LTE and systems like FiOS. Echoing the line taken by his counterpart at Sprint Nextel, Barry West, Lynch said 4G would be about heavy duty internet services, not ‘light broadband’ or voice, and that it would be dominated, not by the usual handset makers, but by ‘hundreds of consumer electronics makers’, which will make serious moves once they see large operators uniting around key standards and making firm commitments to trials.
So far, of course, final LTE standards have not been approved by the 3GPP, but the radio interface has been finalized, so vendors can test basic base station and RF equipment and Vodafone/Verizon aim to start benchmark performance testing on this front early in 2008. Meanwhile, the vendors are not allowing lack of specifications to hinder them from staking their claims in LTE, and the big five western suppliers are all involved in Verizon’s and Vodafone’s initial trial programme. Each vendor – Alcatel-Lucent, Nokia Siemens, Ericsson, Motorola and Nortel Networks ‘ will test equipment in a different city in a Verizon US market or one of Vodafone’s European or Asian territories. The trials will start with pre-standard gear testing basic radio interfaces, and will not develop into full field trials until 2009, or even 2010 if devices are not available in time.
It is likely that Verizon and Vodafone will work, at least in the first stages, with their incumbent suppliers, though since Verizon is transferring from CDMA to a whole new technology family, it will also take a keen interest in the performance of the tests by non-CDMA vendors NSN and Ericsson, since it has not had the choice of working with them before. NSN, unlike its Nokia co-parent, has been making strong progress in the US and now has a portion of every major cellco’s network except Verizon Wireless, including Sprint WiMAX. For its part, Ericsson has identified better US performance as a key objective, so will also be intensely interested in breaking into the Verizon CDMA stronghold (Ericsson pulled out of the CDMA market in 2005, after failing to break into these tier one accounts).