Business, Enterprise

How Vodafone & Verizon will open a "can of whoop-ass" with 4G LTE


Reading through the WSJ interview with Ivan Seidenberg, CEO of Verizon Wireless, one could not stop thinking one thing – is Verizon nothing else but Vodafone’s hidden conqueror for the second decade of the 21st century?

Even though the CEO is obliged to reduce the importance of its non-US investor and even hinted at a possibility that Verizon will probably want to go on its own, it is exactly the Vodafone’s global network that could enable this company to leapfrog AT&T and other competitors. Why? The answer is very simple: the unstoppable evolution of handheld communication.

When Vodafone acquired a 45% share in Verizon Wireless, close to the maximum it can hold under the current closed-market protectionism regime that US is oh-so proud of, this global giant knew exactly what is coming down the line: the death of WCDMA and the rise of GSM and its successor, 4G Long Term Evolution. The merger between two standards was always on the cards, and Vodafone will gladly open its global voice and data network. It isn’t impossible to imagine world-wide call and data rates subscription models through Vodafone.

From one side, world-wide call&data using a single cellphone is something that every traveling businessman dreams of [and beancounters can’t wait to see reduction of those expensive, yet necessary roaming bills]. During the past 10 years in the industry, I never met a global traveler with less than two phones. With 4G LTE offering complete GSM backwards compatibility, we are entering an arena where a carrier such as Vodafone with all of its subsidiaries can offer true flat-rate voice/data services across the Globe, without hurting its bottom line. If you combine this with healthy "for-data for-voice for-user" attitude that goes both throughout Verizon’s and Vodafone’s DNA, it is not hard to predict what lies on the roadmap in front of us.

The question of bands is a very interesting one, and this is something that nobody wants to share publicly. But just as AT&T announced signing the DRM contract with Microsoft for its 700 MHz LTE set-top-boxes, Verizon also is working hard on bringing 4G LTE standard to the low-power low-microwave polluting 700 MHz band. The laws of physics are very straight-forward, and 700 MHz LTE band will require much less power than currently-used 2.1 GHz band for UMTS devices.

We spoke with engineers at Ericsson, and learned interesting data. According to most reviews out there, Apple’s iPhone 3G tops at around four hours of battery lifetime when 3G [UMTS] connection is active. Blackberry 9000 Bold scores around ten hours, or more than double. But when you listen to the music or watch videos, both devices can extract 20+ hours from the battery. The case in point – with 700 MHz LTE adjusted antenna, you could increase your autonomy from four to around 10 hours in case of "iPhone 4G", using the same battery. Ericsson’s say in this matter is very important, since both Verizon and Vodafone mostly selected Ericsson and Alcatel-Lucent to build their 4G LTE networks.

So, you have the case of 1-5 Mbps for 4h, or 100 Mbps for 10 hours. Impossible? Back in 1999, industry experts claimed that services such as Blackberry were Star Trek. Even during 3G demonstrations in early 2000s, visions didn’t go much further from video conferencing. To talk about streaming "not HD, but 4K or Beyond HD" videos on your Cellphone, single Cellphone for the whole world and so on – all of this was made possible by the advances in mobile technology made with GPRS, EDGE and UMTS protocols.

Getting back to Verizon, the company is spending numerous millions of dollars on building FiOS, their FTTH [Fiber-To-The-Home] backbone that offers FullHD [1080p] and true broadband service with speeds of up to 50 Mbps down, and a very important, 20 Mbps upstream. 700MHz LTE offers 100Mbps down and 50 Mbps up at a lower cost, due to lack of drilling and wiring the optical cabling to end-user homes. Bear in mind that nothing needs to be changed – you have 700 MHz signal, getting free-to-air analog TV channels. While there are some limitations of what LTE can do, both Verizon and AT&T spend billions to get the lion’s share of Analog TV spectrum, so that they could save dozens of billions that would be needed in order to wire everybody with optical connection.

If you are asking yourself when, the answer is simple: the end of 2010, with a massive rollout beginning in 2011 – this was info provided by our sources inside the company. We know of at least several Taiwanese companies that are pushing the development of LTE+WiFi home routers and you can expect first product presentations during Computex Taipei 2009, to be held at the beginning of June.

If Verizon’s 700MHz LTE rollout goes according to plan, it really isn’t all that important what Cellphone we will use to access the network, it can be BlackBerry, iPhone or a completely new product that could come out of cooperation such as one between HTC and nVidia on the "nPhone" platform.

And this just might be that something special that could create a whole new market for both Vodafone and Verizon. After all, if you live in the US and get a subscription that includes TV channels and so on, and are able to watch US TV when you’re abroad [for a bit of extra $$$], the number of revenue opportunities for Verizon/Vodafone tie-up is just immense. And best of all, it all comes at a lower cost than it would have in the past.