SAN FRANCISCO, USA: Verizon Wireless plans to build its next high-speed wireless service more quickly than expected with a network covering a population of 110 million people by year-end, the company said on Wednesday.
The aggressive roll-out plan will put pressure on rivals such as AT&T Inc, which is more than a year behind Verizon with the new technology, and on Sprint Nextel as well as smaller rivals Clearwire Corp and T-Mobile USA, a unit of Deutsche Telekom.
Verizon Communications Inc Chief Operating Officer Lowell McAdam promised that in January he will to show off six new devices, such as smartphones and tablets, that will work on the new network in the first half of 2011.
"We'll reach more than one third of all Americans where they live and work ... the day that we flip the switch on this network," McAdam told the audience during his keynote presentation at the CTIA wireless trade show in San Francisco.
Since the vast majority of the U.S. population already have cellphones, Verizon and its rivals are depending on data services for growth. And as consumers increasingly turn to devices like smartphones and tablets for web-surfing and entertainment, this means that operators have to constantly upgrade their networks.
Verizon Wireless, the biggest U.S. mobile provider said the new service would boost its mobile Web surfing speeds by as much ten-times today's speeds by in 38 U.S. markets with a population of 110 million people by year end.
It had previously said the service, based on a fourth-generation (4G) technology called Long Term Evolution (LTE), would cover 30 markets with 100 million people in 2010.
Verizon Wireless, which is 45 percent owned by Vodafone Group Plc, could offer Apple Inc's iPhone or iPad tablet on the new network, McAdam said.
"I expect at some point in time our business interests are going to align and I think things like LTE are another great reason why (Apple) would want to have a device like that or a tablet on this kind of a network, so I fully expect it," he told reporters at an event after his keynote speech.
The Wall Street Journal reported on Wednesday that Verizon would begin selling a new iPhone in early 2011. Verizon declined to comment further on the report and Apple failed to respond to several calls requesting comment.
RACE TO 3G
Verizon has not said how much it will spend on building the network besides the $9 billion it laid out to buy airwaves it expects to use for high-speed services.
Clearwire has already started selling 4G in some markets and has also promised to cover a population of 120 million people by year end. Sprint -- No. 3 U.S. mobile service and majority owner of Clearwire -- uses Clearwire's network to sell 4G services.
AT&T, the No. 2 U.S. mobile service and the exclusive U.S. provider for iPhone, has promised to cover up to 75 million people with LTE by the end of 2011
But in the meantime AT&T says it is beefing up its third-generation (3G) network with speeds comparable to LTE. He would not reveal plans for devices to support the 3G upgrade.
AT&T's Chief Technology Officer John Donovan told Reuters that Verizon's announcement would not change AT&T's LTE plans.
Since Verizon promises 4G speeds ten times faster than its current network, Donovan questioned how its customers would handle suddenly being downgraded to a much slower network when they move from 4G coverage areas to 3G areas.
By the time AT&T starts selling its LTE service in the middle of next year, Donovan said this would not be an issue.
"The average experience will be very good. The difference between a 3G and 4G speed will be barely noticeable and not at all if you take today's applications," he said.
Donovan did not say when AT&T would lose its iPhone exclusivity, saying he was "enjoying" not commenting on this.
AT&T has been criticized for network congestion in markets like New York and San Francisco. Donovan said AT&T had made dramatic improvements but still has challenges in busy areas like midtown Manhattan.
One way AT&T has looked to improve service is by ending flat rate tariffs and charging customers for the data they use, in an effort to make heavy users think more about their usage.
McAdam said that Verizon Wireless would eventually follow AT&T's example in this respect even as he said that there will likely still be a place for unlimited service offerings.
"Our customers are going to need to shift their consumption to more of a pay as you use megabyte usage plan. I expect that we will evolve to that," McAdam said.