The past week saw quite a few developments in the telecom sector. Verizon (NYSE:VZ) continued on its quest to heavily promote LTE this year by launching the cheapest LTE smartphone yet, the LG Lucid, for $79.99. AT&T (NYSE:T) also started promoting LTE with the announcement of the launch of the first LTE-capable Windows Phone, the Nokia Lumia 900, on April 8th. Meanwhile, Sprint (NYSE:S) announced its availability for a potential partnership with Dish that could address its spectrum concerns.
Verizon may have been the first to launch its 4G LTE network more than a year ago, but customers haven’t taken to the new high-speed technology in meaningful numbers yet. Earlier, the company’s CFO Fran Shammo had said that only about 5% of its total subscriber base use an LTE smartphone right now.
- Key Takeaways From Verizon’s Q1 Results
- Verizon Q1 Preview: Revenues, Margins Could Improve On Postpaid Adds, EIP Shift
- How Has Postpaid Churn Of The Major U.S. Wireless Carriers Trended In Recent Years?
- Verizon Is Preparing To Bid For Yahoo’s Internet Business. How Much Is It Worth?
- How Have The Prepaid Subscriber Bases Of The Big Four U.S. Carriers Trended Over The Last 5 Years?
- How Is Verizon’s Revenue Composition Expected To Change Over The Next 5 Years?
In a bid to increase LTE adoption, Verizon is now trying to lure first-time LTE smartphone buyers with the mid-range LG Lucid smartphone, that it will be offering for $79.99 on Thursday. (see Verizon Gets Aggressive With 4G Plans With Cheapest LTE Smartphone Yet) At that price point, it not only undercuts Nokia’s Lumia 900 LTE smartphone that will be released on AT&T at $99.99 on April 8th, but is also the cheapest LTE smartphone in the market.
Verizon has already made its aggressive LTE intentions clear by announcing that it plans to introduce only those phones that support the high-speed network this year. Moreover, it has also decided to increase its target year-end LTE coverage to 260 million Americans from the earlier 250 million target. Verizon is currently well ahead of AT&T and Sprint in terms of LTE deployment with coverage in almost 200 markets across the U.S and plans to add another 200 by the year’s end.
Early next month on April 8th, AT&T will launch the first LTE-enabled Windows Phone, the Lumia 900, for $99.99. AT&T is lagging behind Verizon in terms of LTE coverage and will he hoping to bridge that gap with the launch of popular smartphones in the market. Even Chinese telecom carriers have jumped on Nokia’s Lumia line of smartphones, with the first Lumia released in China on March 28th. Also, with Andoid smartphones and the iPhone taking up the lion’s share of the smartphone market, carriers will be hoping for the emergence of a competitive third alternative mobile ecosystem in Windows Phone. (see Nokia Faces Big Tests This Year In China And U.S.)
AT&T is rumored to afford the Lumia a “hero” status at its stores, which means that that the Nokia smartphone will benefit from a greater marketing push of not only its founding partners but also the second largest national carrier. Also, as part of the marketing campaign, the Lumia 900 has already been made the exclusive free phone for all AT&T employees. This will create greater awareness of the product among staffers at the carrier’s retail stores and help them promote the phones better.
Meanwhile, with spectrum getting more and more difficult to acquire and talks with potential partners falling through, Sprint’s spectrum options seem to be dwindling by the day. But the third largest wireless carrier in the U.S. revealed this week that it may still have one left – Dish Network (NASDAQ:DISH). While Sprint may not be able to buy the spectrum outright from Dish following the FCC’s recent moves which make it likely that the latter will secure approval to build out its own wireless network, Sprint can still look to partner with Dish and host its spectrum. (see Sprint Eyes Spectrum Deal With Dish) Sprint is looking for a replacement after its deal with Lightsquared met with an early demise after the FCC refused to give the latter approval to use its satellite spectrum for LTE.
Sprint needs additional spectrum in order to bolster its LTE plans, in which it is lagging behind both Verizon and AT&T. Currently, Verizon has an LTE network that covers about 200 million Americans in 196 markets across the U.S. and AT&T’s LTE network covers about 75 million Americans. On the other hand, Sprint is yet to announce its first LTE market.