The wireless giant
Verizon Communication Inc.
) is running ahead of its 4G LTE deployment schedule. The company
will launch its LTE in 400th market (Marquette, Michigan) on
October 18, two months ahead of the schedule.
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Verizon will introduce 21 new markets on that day with another 30
planned for November and December. Currently, Verizon covers 75% of
the U.S. population and it expects its 4G footprint to expand
across the nation by the middle of next year.
Verizon is way ahead of its rivals
Sprint Nextel Corp.
) and T-Mobile USA in deploying LTE networks. The LTE coverage of
AT&T, the second-largest U.S. mobile service, is currently
available in 60 markets and expects to reach 100 by the end of the
year. AT&T expects the LTE deployment to be almost completed by
the end of 2013.
Sprint, the third-largest wireless operator, is in the process of
expanding its high-speed LTE networks in 100 additional cities in
the coming months. It made its LTE debut in five major markets -
Atlanta, Dallas, Houston, Kansas City and San Antonio - in
mid-July. The company expects to complete nationwide deployment by
the end of 2013. The LTE coverage is expected to reach more than
120 million people (or roughly half of its CDMA footprint) by the
year-end and 250 million by next year. The fourth wireless provider
T-Mobile USA, unit of
), plans to upgrade to LTE networks in 2013.
To support its 4G services, Verizon has introduced 37 different LTE
devices including tablets, dongles, mobile hotspots and smartphones
since the launch of its LTE network. The recently launched Motorola
Droid RAZR MAXX, the Motorola Droid 4, the Droid Incredible 4G LTE
and the Samsung Galaxy S III will further boost its portfolio.
Additionally, Verizon recently introduced in-home wireless
broadband service, "HomeFusion Broadband", based on LTE technology
in some rural and remote homes, which do not have access to DSL or
At the end of September, Verizon's LTE network accounted for about
35% of the data traffic. The company expects majority of the
traffic to be on LTE soon due to the surging demand for high-speed
wireless services. The rapidly growing 4G services will lift the
company's data revenue going forward.
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
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).