Verizon Wireless has been beefing up its network
and believes it will have no problem handling
iPhone-type loads, a claim that could be put to
the test this year if the carrier signs up millions of
subscribers using the Apple Inc. device.
Verizon Wireless, the country's largest wireless
carrier, is confident enough in its network that it
will offer unlimited data-use plans when it starts
selling the iPhone around the end of this month, a
person familiar with the matter said. Such plans
would provide a key means of distinguishing its
service from rival AT&T Inc., which limits how
much Internet data such as videos and photos its
customers may use each month.
AT&T has struggled to overcome complaints
about network quality ever since it started
exclusively selling the iPhone in the U.S. in 2007.
That contributed to a decision last summer to
offer new iPhone and other smartphone
customers only pricing plans that cap how much
data they send and receive..
The move was aimed in part at gaining a
measure of control over heavy iPhone users,
who have overtaxed the carrier's network,
leading to complaints about dropped calls and
spotty service.
It wasn't clear how long Verizon would offer
unlimited-data plans. Its executives have said
repeatedly that the industry needs to move to
some form of tiered pricing —charging different
prices for different amounts of data use—as
mobile Internet service use rises, but for the
moment the carrier is sticking to its existing plans.
Verizon Wireless, majority-owned by Verizon
Communications Inc., has a lot at stake as it starts
to carry the iPhone, which it will announce
Tuesday at an event in New York City, people
familiar with the matter say. Verizon more than
any other U.S. carrier has built its reputation on
its network quality, and any stumble in handling
iPhone traffic will call into question Verizon's
major selling point. On the other hand, if it does
handle the iPhone well, then AT&T will have a
harder time arguing it didn't mismanage its own
network.
Verizon executives point to their network's
success handling already heavy laptop traffic and
a growing number of data-guzzling Android-
based smartphone users on its main, 3G
network.
"Whether they are iPhones or Droids, they are
smartphones," Verizon Chief Executive Ivan G.
Seidenberg said in a mid-November interview.
"Regardless of the mix, we are prepared to carry
more data."
Anthony J. Melone, Verizon's chief technology
officer, said Sunday the company invested
heavily in its 3G network last year to handle
surging smartphone traffic. At the end of
September, the carrier had some nine million
Android subscribers, up from none a year earlier,
according to Majestic Research.
Verizon also has been building a new, faster 4G
network that it launched in December. Mr. Melone
said that network will help by handling a lot of
new data traffic and offloading demand from its
3G network as existing customers upgrade to
faster wireless service.
"We added enormous capacity to the network in
one fell swoop," Mr. Melone said. "It is there
waiting for us to grow into it. That will help me
tremendously with my 3G network."
Mr. Melone wouldn't comment on how the
network would handle the iPhone, but said, "All
of this planning can support any successful
device."
AT&T has acknowledged it underestimated the
stress the iPhone would put on its network. The
carrier boosted spending this year particularly in
the key markets of New York City and San
Francisco, but still struggles with the perception
its network is weak.
In December, a survey by Consumer Reports put
AT&T's network quality in last place. Verizon,
meanwhile, was the top-ranked major carrier.
AT&T says its network is faster and has
advantages like allowing users to browse the
Web while talking on the phone.
The design of Verizon's network, which uses a
different technology called CDMA, has to this
point allowed only one or the other.
"We think customers will prefer AT&T's faster
speeds and better functionality," said an AT&T
spokesman said.
Brisk demand is expected. Analysts think Verizon,
which has 93 million subscribers, could sell nine
million to 12 million iPhones this year, a huge
boost in the phone's key U.S. market.
To put that into perspective,AT&T sold 11.1 million
iPhones in the first nine months of 2010. Piper
Jaffray & Co. projects a full-year total of 14.5
million iPhones for AT&T, accounting for 12% of
Apple's overall revenue and 30% of its iPhone
sales. In its fiscal year ended in September, Apple
reported revenue of $20.34 billion.
Piper Jaffray analyst Gene Munster said Wall
Street is expecting sales of the Verizon iPhone to
boost Apple's overall sales by 5% —or more if
Verizon does a better job of luring new
customers than it does turncoats from AT&T.
Source: http://online.wsj.com/article/SB10001424052748703667904576072110862862244.html
and believes it will have no problem handling
iPhone-type loads, a claim that could be put to
the test this year if the carrier signs up millions of
subscribers using the Apple Inc. device.
Verizon Wireless, the country's largest wireless
carrier, is confident enough in its network that it
will offer unlimited data-use plans when it starts
selling the iPhone around the end of this month, a
person familiar with the matter said. Such plans
would provide a key means of distinguishing its
service from rival AT&T Inc., which limits how
much Internet data such as videos and photos its
customers may use each month.
AT&T has struggled to overcome complaints
about network quality ever since it started
exclusively selling the iPhone in the U.S. in 2007.
That contributed to a decision last summer to
offer new iPhone and other smartphone
customers only pricing plans that cap how much
data they send and receive..
The move was aimed in part at gaining a
measure of control over heavy iPhone users,
who have overtaxed the carrier's network,
leading to complaints about dropped calls and
spotty service.
It wasn't clear how long Verizon would offer
unlimited-data plans. Its executives have said
repeatedly that the industry needs to move to
some form of tiered pricing —charging different
prices for different amounts of data use—as
mobile Internet service use rises, but for the
moment the carrier is sticking to its existing plans.
Verizon Wireless, majority-owned by Verizon
Communications Inc., has a lot at stake as it starts
to carry the iPhone, which it will announce
Tuesday at an event in New York City, people
familiar with the matter say. Verizon more than
any other U.S. carrier has built its reputation on
its network quality, and any stumble in handling
iPhone traffic will call into question Verizon's
major selling point. On the other hand, if it does
handle the iPhone well, then AT&T will have a
harder time arguing it didn't mismanage its own
network.
Verizon executives point to their network's
success handling already heavy laptop traffic and
a growing number of data-guzzling Android-
based smartphone users on its main, 3G
network.
"Whether they are iPhones or Droids, they are
smartphones," Verizon Chief Executive Ivan G.
Seidenberg said in a mid-November interview.
"Regardless of the mix, we are prepared to carry
more data."
Anthony J. Melone, Verizon's chief technology
officer, said Sunday the company invested
heavily in its 3G network last year to handle
surging smartphone traffic. At the end of
September, the carrier had some nine million
Android subscribers, up from none a year earlier,
according to Majestic Research.
Verizon also has been building a new, faster 4G
network that it launched in December. Mr. Melone
said that network will help by handling a lot of
new data traffic and offloading demand from its
3G network as existing customers upgrade to
faster wireless service.
"We added enormous capacity to the network in
one fell swoop," Mr. Melone said. "It is there
waiting for us to grow into it. That will help me
tremendously with my 3G network."
Mr. Melone wouldn't comment on how the
network would handle the iPhone, but said, "All
of this planning can support any successful
device."
AT&T has acknowledged it underestimated the
stress the iPhone would put on its network. The
carrier boosted spending this year particularly in
the key markets of New York City and San
Francisco, but still struggles with the perception
its network is weak.
In December, a survey by Consumer Reports put
AT&T's network quality in last place. Verizon,
meanwhile, was the top-ranked major carrier.
AT&T says its network is faster and has
advantages like allowing users to browse the
Web while talking on the phone.
The design of Verizon's network, which uses a
different technology called CDMA, has to this
point allowed only one or the other.
"We think customers will prefer AT&T's faster
speeds and better functionality," said an AT&T
spokesman said.
Brisk demand is expected. Analysts think Verizon,
which has 93 million subscribers, could sell nine
million to 12 million iPhones this year, a huge
boost in the phone's key U.S. market.
To put that into perspective,AT&T sold 11.1 million
iPhones in the first nine months of 2010. Piper
Jaffray & Co. projects a full-year total of 14.5
million iPhones for AT&T, accounting for 12% of
Apple's overall revenue and 30% of its iPhone
sales. In its fiscal year ended in September, Apple
reported revenue of $20.34 billion.
Piper Jaffray analyst Gene Munster said Wall
Street is expecting sales of the Verizon iPhone to
boost Apple's overall sales by 5% —or more if
Verizon does a better job of luring new
customers than it does turncoats from AT&T.
Source: http://online.wsj.com/article/SB10001424052748703667904576072110862862244.html
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