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Verizon accelerates LTE build

Fri, 11/09/2012 - 2:19pm
Maisie Ramsay, Wireless Week

Verizon Communications CFO Fran Shammo told analysts yesterday that the company is accelerating the deployment of its LTE network, which already has a wide lead over AT&T’s LTE coverage.

Verizon Wireless now plans to complete its LTE rollout by the middle of next year, two quarters ahead of its previous goal to blanket its 3G footprint with LTE by the end of 2013.

“We will have completed this build by mid-2013,” Shammo said, speaking at the Wells Fargo Securities Technology, Media and Telecom Conference in New York City.

The network currently covers more than 250 million people. By comparison, AT&T doesn’t expect to hit the 250-million mark with its own LTE service until the end of next year, and Sprint’s LTE deployment is still in its early stages.

Addressing the outages that plagued Verizon’s LTE network early on, Shammo conceded it “had some flaws here and there,” but he said “currently today, it’s very stable, performing very well.” Customers have flocked to the service, and by the end of September, Verizon had nearly 15 million LTE devices in its postpaid base after activating 3.7 million LTE smartphones in the third quarter alone.

More than 35 percent of Verizon’s data traffic is currently routed over LTE.

Verizon is boosting the capacity of its LTE network with AWS spectrum acquired from a group of cable companies, a deal the FCC cleared in August. As part of its bid to get government approval for the transaction, Verizon pledged to sell off its lower 700 MHz A-block and B-block licenses, which it is not currently using for LTE. Instead, its LTE network runs on 700 MHz C-block spectrum.

Shammo suggested the spectrum selloff could be scaled back during his remarks.

“Some people thought it was a bargain purchase, which it is not,” he said. “Certain portions we can sell, and other portions we cannot sell, and we are developing those internal plans to launch that spectrum.”

Verizon will provide an update on the auction process during the first quarter of next year, he said.

Shammo said the AWS purchase put Verizon “in a very good place” for the next five years, but he said the company will still participate in the FCC’s pending auctions of broadcast television spectrum.

“When spectrum comes up for sale, it’s a once-in-a-lifetime chance to buy or not to buy,” he said. “We’re not going to be out of the market for five years.”

On the subject of consolidation – a hot topic given T-Mobile USA’s acquisition of MetroPCS and Softbank’s purchase of a controlling stake in Sprint – Shammo said Verizon was focused on organic growth because regulators would likely frown on a merger with another top-tier provider.

“I don’t think we’d ever get that approved,” he said, reflecting industry sentiment after the government blocked AT&T’s takeover of T-Mobile. “The key for Verizon Wireless is to execute on the plan we laid out, and it’s not necessarily through acquisitions.”

That strategy paid off during the third quarter, when Verizon managed to grab much of the growth in the wireless sector with the addition of 1.5 million net new postpaid subscribers. AT&T, the closest competitor to Verizon, added just 678,000 net postpaid subscribers.

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