More LTE Markets for Verizon - Analyst Blog


The largest U.S. mobile service provider Verizon Communications Inc. ( VZ ) is expanding its Long Term Evolution (LTE) based 4G networks to more cities. The LTE offers mobile broadband download speeds of 5-12 Mbps and upload speeds of 2-5 Mbps.                                    

Verizon will expand its LTE services across major cities of California - Bakersfield, Sacramento, Fresno, Modesto, San Francisco Bay Area, Salinas and Monterey, Stockton, San Luis Obispo and Visalia as well as Reno in Nevada in coming weeks.

Additionally, the company has its expansion plan in the Ohio area covering two markets - Greater Columbus and Cleveland - scheduled on April 19. Besides, Verizon will also cover Sarasota-Bradenton in Florida later in the month.

Mobile broadband services are currently the industry's most powerful growth drivers. Since the launch in December 2010, Verizon has deployed 4G LTE services in 203 markets, covering more than 200 million people. The company expects to expand its 4G networks to 400 markets by the end of this year and the entire nationwide 3G footprint by mid-2013.

Verizon Wireless, a joint venture between Verizon and Vodafone Group plc ( VOD ) is way ahead of its rivals AT&T Inc. ( T ) and Sprint Nextel Corp. ( S ) in deploying LTE networks. The LTE coverage of AT&T, the second-largest U.S. mobile service, has reached 74 million Americans. The company expects this number to double by the end of this year and deployment to reach to 80% of the U.S. population by the next year. Further, AT&T plans to introduce LTE in several markets by this summer. The addition of 12 markets will take the number to 40 from the current 28.

Sprint, the third-largest wireless operator, was the first to launch 4G services in 2010 through WiMax (a wireless broadband technology) network in collaboration with Clearwire Corp. ( CLWR ). Now, the company plans to launch its own LTE networks in mid-2012 and expects to complete the deployment by year-end 2013. Initially, LTE services will be deployed in six markets including Atlanta, Baltimore, Dallas, Houston, Kansas City and San Antonio.

The LTE deployments have become the benchmark of mobile technology and the life-blood for operators across the world. It will allow the global carriers to take advantage of new and unused spectrums, and simultaneously expand their abilities to deliver the strongest and the most advanced networks. In addition, enhancement of network capabilities will lead to the creation of new job opportunities, economies of scale and open up markets that were previously inaccessible.

Nevertheless, LTE poses a major risk to Verzion's wireless segment as the other wireless service providers may delay their deployment of LTE or change their selection and adopt different next-generation technologies, including those that are incompatible with Verizon.

We are maintaining our long-term Neutral recommendation on the stock. Currently, the stock retains the Zacks #3 (Hold) Rank for the short term (1-3 months).

CLEARWIRE CORP ( CLWR ): Free Stock Analysis Report
SPRINT NEXTEL ( S ): Free Stock Analysis Report

AT&T INC ( T ): Free Stock Analysis Report
VODAFONE GP PLC ( VOD ): Free Stock Analysis Report
VERIZON COMM ( VZ ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CLWR , S , T , VOD , VZ

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