Verizon's LTE data deal eases iPhone strain on 3G
The carrier offers double data allowances as a promotion, seeking to convert users to 4G and free up capacity for the Apple handset
Published: 10 November, 2011
READ MORE: US | Verizon Wireless | iPhone | 1XEV-DO | LTE
The downside of the iPhone 'magic' for carriers has always been the stress its data-hungry users and its own inefficiencies place on their networks. AT&T famously invested in major 3G network expansion largely to support its precious iPhone exclusive, but Verizon Wireless, now it has its own iPhone, is taking a different tack. It has launched a promotion doubling the amount of data its LTE smartphone customers can use per month, which aims to achieve a double whammy - convert as many non-iPhone users as possible to the more efficient new network, while freeing up more of the older CDMA network for the Apple handset, giving those users a better experience.
The strategy was explained by Verizon's CFO Fran Shammo, speaking at an investor conference this week. The promotion, which started on November 8 and will last through the holiday season, will be "beneficial from a financial standpoint", he said. The LTE network is lightly loaded and has high capacity, so it can easily sustain the heftier data allowances. By contrast, similar usage on EV-DO would have required investment in additional capacity. But by moving users to LTE, Verizon should be able to avoid expanding the 3G system for the iPhone, which Shammo admitted puts "capacity pressure" on EV-DO.
In order to maintain a strong experience for Apple users, "we need to make sure that I don't have to put in any more capacity to 3G, so in essence, what we are doing is we are enticing people on a Droid handset to move to a Droid handset on 4G," he explained. "So the theory behind this was to entice the users to move to 4G to free up the capacity for the iPhone, so that I don't have to continue to invest in the 3G network." As reported by Bloomberg, he added: "We are accelerating [LTE] as fast as we can because we see the expense benefits, the operating benefits, the efficiency of the network. The more we can get over to that network, the more beneficial it is for us."
The promotion should also heighten interest in Verizon's latest Android/LTE superphones - the Motorola Droid RAZR, HTC Rezound and Samsung Galaxy Nexus. It could also draw some thunder from AT&T, which has just launched its first two LTE/Android smartphones, the HTC Vivid and Samsung Galaxy SII Skyrocket.
Customers who sign up for a 2Gbytes plan for $30 will actually get a 4Gbytes allowance, and those who opt for 5Gbytes ($50) or 10Gbytes ($80) will also get twice that amount of data. Verizon will also offer a promotional 300Mbytes tariff for $20, which will apply to all its data-capable handsets and networks.
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