Verizon Wireless is officially joining in on this year’s major new cellular network technology: Voice over LTE, or “VoLTE.” VoLTE allows voice calls on compatible smartphones to be made over the previously-data only LTE network technology. This allows for higher-quality, better sounding (“HD Voice”) phone calls to be placed. The rollout will occur “later this year”, or “in the coming months” depending on which part of the press release you believe:
United States-based carrier AT&T today officially announced its rollout of voice-over-LTE (VoLTE) calls. The VoLTE rollout comes in tandem with AT&T HD Voice launch, which provides better sounding phone calls. Starting on May 23rd, Illinois, Indiana, Minnesota and Wisconsin will be the initially supported markets for these features, but AT&T says to expect a more complete rollout as time goes on:
Verizon Wireless, once the gold standard for LTE, has admitted that it is struggling to keep up with demand in the big cities – with some users being dropped down to slower 3G speeds. The carrier’s Chief Financial Officer Fran Shammo said yesterday:
There are certain pockets where we’re absolutely going to experience that down tick from the LTE network down to 3G because of capacity constraints … Read more
As Apple’s September 10th iPhone unveiling approaches, we’ve heard that Verizon Wireless is blocking its retail employees from requesting vacations between Wednesday, September 18th and Sunday, September 22nd. Based on Apple historically shipping new versions of the iPhone about a week and half following the unveiling, it would make sense for the new iPhones to arrive for customers on Friday, September 20th.
Verizon CFO Fran Shammo spoke at the Duetsche Bank Annual Media, Internet & Telecom conference this morning, where he was asked a few questions related to the iPhone. Verizon reported its fourth quarter 2012 earnings last month with 9.8 million smartphone activations—a record 6.2 million of which were iPhone. We knew about half, or 3.1 million, of those iPhone sales were driven by the first full quarter with the iPhone 5, but today Shammo talked about just how important getting the free iPhone 4 was during the quarter:
But this past fourth quarter you had a couple — you had really one thing happen that never happened before, especially with Verizon Wireless, and that was for the first time ever, because of the iPhone 5 launch, we had the 4 at free. So it was the first time ever you could get a free iPhone on the
Verizon Wireless network. So that produced a lot of volume for us. We had a lot of new customers come into Verizon who took that free phone, and that was great for us because again if you think about — we sold a lot of LTE product in the fourth quarter. We sold a lot of 3G product from the iPhone products in the fourth quarter.
But that is key for us, because if you think about our two networks it is important for me as I migrate people into the 4G network I still have this very large 3G network that operates very efficiently. We are not investing any more capital in that network other than to keep it up and running, so no more coverage capital, no more capacity capital. If I can keep that network up and running that just generates more contribution margins for us. So it is critical for us to balance that. But, again, I think you had one point in time where you had a free phone, a free Apple phone that never happened before with us and that generated a lot of volume.
While noting that 53 percent of the carrier’s smartphone activations were iPhones in 2012, Shammo was asked about the opportunity to incentivize employees to sell non-Apple devices that would also come with lower subsidies for Verizon:
The answer is, no, we don’t and it is critical that we don’t do that. The reason for that is because what is more important for us is when a customer walks into a store that customer walks out with a phone that they will be happy with and not return under our 30-day guarantee. Because the worst thing that can happen for us is for me to incentivise a salesperson to get you into a phone that you walk out the door with thinking you are going to like and in three days you come back because you don’t like it. Therefore, now I’ve just subsidized two smartphones because that phone you used I can’t resell as a new phone.
You can read more from Shammo’s presentation and where he discusses the growth of Share Everything plans, tablets, and more here.
Verizon has reported its Q3 2012 earnings this morning with “a third consecutive quarter of double-digit percentage growth.” The nation’s second-largest carrier claims it experienced $29 billion in total operating revenue (3.9-percent gain over last year) and sold 6.8 million smartphones in total for the third quarter. Of the 6.8 million, Verizon reported selling 3.1 million iPhones. Just over one-fifth (or roughly 651,000) of those were the iPhone 5 that saw supply constraints. To compare, during Q2, Verizon sold 2.7 million iPhones.
The carrier also shed more light on its aggressive LTE rollout across the country. Its LTE service is now available to 250 million people in 419 markets across the United States. Furthermore, on the company’s earnings call, CFO Fran Shammo reiterated that its new Share Everything data plan has been “successful and well-received.”
You can find the press release below for specifics: Read more
J.D. Power and Associates is out with the second half of its 2012 “U.S. Wireless Network Quality Performance Study”, and Verizon once again come out on top for network performance in five of the six regions included in the report. Only second to U.S. Cellular in the North Central region, Verizon posted the best overall network performance among the other carriers in the remaining regions based on 10 key problem areas that could impact the customer experience.
For a 16th consecutive reporting period, Verizon Wireless ranks highest in the Northeast region. Verizon Wireless achieves fewer customer-reported problems with dropped calls, initial connections, transmission failures and late text messages, compared with the regional average. Verizon Wireless also ranks highest in the Mid-Atlantic, Southeast, Southwest and West regions… U.S. Cellular ranks highest in the North Central region for a 14th consecutive reporting period. Compared with the regional average, U.S. Cellular has fewer customer-reported problems with dropped calls, failed initial connections, audio problems, failed voice mails and lost calls.
The study also covered the customer experience specifically for data-related problems. Not surprisingly, LTE device users experienced significantly less issues than older 3G devices like the iPhone:
The study finds that the number of data-related problems, especially those related to slow connection speeds, is significantly lower among customers using 4G LTE-enabled devices than among those using devices with older 3G/4G technology standards, such as WiMAX and HSPA+… For example, among customers with 4G LTE-enabled devices, the problem incidence for excessively slow mobile Web loading is 15 PP100, compared with the industry average of 20 PP100. Furthermore, the overall problem incidence for excessively slow mobile Web loading is even higher among customers with WiMAX and HSPA+ technology
Based on responses from over 26,000 U.S. wireless customers, the report explained how network performance was calculated:
According to a report from AllThingsD, Verizon Wireless will soon change the way it charges customers for cellular/data plans in a major way. Rather than charging customers for phones calls or messages sent, the report claimed Verizon would charge “almost exclusively based on how much data” is consumed. The new “Share Everything” plans will also be the first in the United States that allows users to share their data with up to 10 devices through a single account:
The plans, known as “Share Everything,” allow users an unlimited number of calls and texts and also allow data usage to be pooled among up to 10 devices on one account. With the move, Verizon becomes the first U.S. carrier to offer the ability for customers to share a bucket of data across multiple devices.
AllThingsD noted that AT&T also has plans for shared data options, but it did not provide more details. As for Verizon’s new plans, which will apparently kick-in June 28, the report explained the cost of the data plan and pricing metrics based on a per-device fee. In other words, you will have to pay roughly $40 per smartphone ($10 per tablet), and then opt for either a $50 1GB data plan or a $100 10GB plan. While the report claimed the new pricing should not impact the cost of plans for users who continue consuming the same amount of data, it is clear that those signing a new plan for a single smartphone are getting a bit less for their money:
AT&T’s variant of the family data plan is on the horizon.
The company’s CEO of Mobile Business Ralph de la Vega told CNET on the sidelines of the CTIA Wireless trade show that the upcoming shared plan would allow consumers to buy one package of data to split among multiple devices, which is a forward-thinking step that could encourage tablet sales.
“I’m very comfortable with the plan that will be offered to our customers,” revealed de la Vega.
Just a few months ago, the executive seemed to doubt family plans due to IT, billing, and device subsidization issues. He even remarked his goal to “get it right”— instead of unveiling the strategy prematurely.
Despite reports that Verizon’s fourth quarter earnings were hurt mainly by high subsidies for iPhone, Verizon announced on Tuesday it sold 4.3 million iPhones– over 50 percent of the 7.7 million total smartphones sold during the quarter. This statistic follows reports earlier this month that Verizon sold approximately 4.2 million iPhones during the holiday quarter. Compare that figure to the 1.6 million 4G LTE smartphones sold during the same quarter, of which the carrier offers more than 18 (mostly Android) devices versus a few iPhone models. These numbers show consumers are still choosing 3G iOS devices over the latest generation of 4G LTE smartphones from other vendors.
According to Barclays Capital analyst James Ratcliffe, even with the high subsidy, Verizon will see a positive cash flow of approximately $1,600 per iPhone. His estimate is based on the nearly $2,000 spent over a two-year contract and a $400 subsidy for the same period. Ratcliffe explained to Bloomberg: