Verizon Wireless, a joint venture between
Verizon Communications Inc.
Vodafone Group PLC
), added 46 new cities to its nationwide LTE network. The company
also expanded its coverage in its existing 22 markets.
With this expansion, the company's coverage will increase to 304
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.
The company continued to grow its 4G 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 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 41
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.
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 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, dongles, 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 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
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 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 #2 (Buy) Rank for the
short term (1-3 months).
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