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Innovation

Verizon CEO talks 4G, importance of iPhone alternatives

Verizon CEO Ivan Seidenberg said increased data demands and the rise of smartphones other than iPhone, as well as a 4G rollout, will help Verizon maintain its value proposition.
Written by Sam Diaz, Inactive on

You can't win a wireless war by competing on price alone.

At the Citi Global Entertainment, Media and Telecom Conference in San Francisco, Verizon Chairman and CEO Ivan Seidenberg said that his company tries to differentiate itself by strengthening the value proposition. Sure, you have to compete on price for service plans and devices and, increasingly, data packages. But, it takes more than that.

Think about Verizon's marketing messages - from the "Can you hear me now?" ads a few years ago to today's "There's a Map For That" campaign. No, there's no iPhone offered by Verizon. And no, the company is matching pricing plans such as Sprint's Unlimited Everything. But it is touting its network as the best and that's paid off, he said.

"The messages about the quality of our network... is reasonably strong in the marketplace," he said.

He didn't resort to bashing the competition, notably AT&T, but did take a couple of small jabs. As he addressed a question about data traffic demand, he referenced "this business of 3-4 percent of the users hogging a lot of bandwidth." On several occasions, AT&T Mobility CEO Ralph de la Vega has talked about these so-called data hogs.

In a few years, it will be 20 percent of the customers who are using that amount of data - especially as data-centric devices grow in popularity and other uses of that network, such as streaming video, become more popular. The issue has to be solved - and quickly, he said. It's a growth issue.

The future, he said, is data. The industry, he said, is projecting that 50-60 percent of mobile traffic in the next five years could be video, which will drive even more data use.

This week, AT&T issued a statement about the progress that it's making to its 3G networks, including some problems it's still having in New York and San Francisco. What's interesting is that while AT&T is talking about upgrades to 3G, Seidenberg stayed focused on rollouts of 4G, or LTE, which are expected to begin in late 2010. (He suggested the fourth quarter.)

The goal, he said, is to cover 85-90 percent of the country with 4G within 24 months of the initial rollout. Can that timeline be accelerated? Perhaps, he said, calling it an "already very aggressive schedule."

As for an update on 4G: The trials in Seattle and Boston are going well, he said. The peak throughputs are in the range of 15-17 mbps while average throughputs are closer to the 7-9 mbps range. He said the company is "excited about the pie-enhancing capabilities of 4G."

With that sort of speed, an iPhone on Verizon makes perfect sense, right?

Seidenberg mentioned the importance of "iconic devices" to help strengthen Verizon's overall value proposition. He was asked about the push to offer new high-profile devices to the lineup and quickly replied with mentions of the Droid, the Eris and Nexus One - all Google Android devices. He also suggested that Palm devices could be in the future.

They're "not quite the iPhone," he said. "But it's close enough for the market to be interested."

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