The wireless leader
Verizon Communications Inc.
) is expanding its 4G Long Term Evolution (LTE) networks to more
cities. The LTE offers mobile broadband download speeds of 5-12
Mbps and upload speeds of 2-5 Mbps.
Verizon Wireless, a joint venture between Verizon and
Vodafone Group PLC
), will add 28 new cities to its nationwide LTE network and expand
its coverage to the existing 11 markets this week. With this
expansion, the company's coverage will increase to 258 markets,
implying more than two-thirds of the U.S. population.
This development is in line with Verizon's target of expanding
4G networks to 400 markets by the end of this year and the entire
nationwide 3G footprint by the middle of next year.
Verizon Wireless 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, has reached 35
markets with 74 million Americans. The company expects this number
to double by the end of this year and deployment to reach 80% of
the U.S. population by 2013. Further, AT&T plans to introduce
LTEin several markets by this summer, bringing the total number to
Sprint, the third-largest wireless operator, plans to launch its
own LTE networks in six markets by mid-year and expects to complete
the deployment by the end of the 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 a rich collection of 4G
LTE devices including tablets, mobile hotspots and smartphones. The
recently announced Motorola Droid RAZR MAXX, the Motorola Droid 4,
the upcoming Droid Incredible 4G LTE and the Samsung Galaxy S III
will further boosts its incredible 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 cables.
The surging demand for smartphones, tablets and other devices
signals a new wave in the industry and opportunities for Verizon to
expand. The rapidly growing 4G services will lift the company's
data revenue going forward.
Nevertheless, LTE poses a major risk to Verizon'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).
DEUTSCHE TELEKM (DTEGY): Free Stock Analysis
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AT&T INC (T): Free Stock Analysis Report
VODAFONE GP PLC (VOD): Free Stock Analysis
VERIZON COMM (VZ): Free Stock Analysis Report
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