On December 5th, Verizon Wireless launched its Long Term Evolution (LTE) network in 38 cities and in over 60 airports. This deployment signals the beginning of the 4G/LTE wars. The fuss over 4G/LTE networks is based on significantly faster network speeds which enable a smoother, faster, less jittery video experience for customers. Verizon’s LTE network is expected to run nearly 10 times faster than the company’s 3G EVDO network with downstream speeds of 5 Mbps to 12 Mbps and upstream speeds of 2Mbps to 5Mbps.
Initially, Verizon Wireless is taking a land grab approach to marketing its LTE network service primarily to business customers who can connect to the Internet using their laptops. Data plans start at $50 per month for 5GB of data, or $80 per month for 10B of data. Additional data use above these data plan caps will cost $10 per GB. Lower price point plans which would appeal to cost conscious consumers were not identified. Verizon plans to offer LTE enabled smartphones in mid 2011.
The $50 per month baseline LTE data pricing plan is undercutting Verizon’s current 3G data access prices. Why undercut 3G data prices? Because the 4G/LTE competitive landscape is heating up. Clearwire is deploying a WiMax network in 68 markets, and T-Mobile is positioning its HSPA+ network as 4G in more than 80 markets. In addition, Verizon is hoping to capture a significant share of customers in the 4G market before AT&T jumps into the 4G arena in 2011, so expect more 4G/LTE announcements and increased competition for 4G customers in the coming year.