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Competition ramps up for high-speed networks

Rochester Business Journal
September 28, 2012

Verizon Wireless Inc. has spent more than $200 million since the start of 2011 to expand its high-speed 4G LTE network in Upstate New York, officials said. Now AT&T Inc. is bringing its 4G LTE network to the area.

Both AT&T and Verizon Wireless officials said 4G LTE, which stands for "long-term evolution," is capable of delivering speeds faster than many other mobile Internet technologies and up to 10 times faster than its predecessor, 3G.

AT&T plans to roll out its 4G LTE service here by year's end. The move into Rochester is part of the company's plan to expand 4G LTE into more than 50 markets this year. Those markets include major cities such as Philadelphia and Detroit, as well as smaller markets in New York such as Syracuse and Albany.

"The 4G LTE network is a very significant jump in technology," said Gene Fassett, executive director of network for Verizon Wireless in Rochester. "It's all about speed and mobility.

"You're going to get faster upload and download speeds when using a smartphone, tablet or while you are at a mobile hotspot. There's no buffering when it comes to playing videos. It's almost like having your home wireless connection with you on a mobile device."

Verizon Wireless has had quite a jump on AT&T for 4G LTE, especially upstate. It has been rolling out its 4G LTE network to parts of Upstate New York for almost two years.

Fassett said Rochester contains the largest customer base for Verizon Wireless of any market in Upstate New York. This region was part of Verizon Wireless' national 4G LTE launch in December 2010.

Verizon Wireless' 4G LTE network is available to more than 75 percent of the U.S. population in more than 370 markets nationwide, Fassett said. He anticipates that by the end of this decade, Verizon Wireless will be running solely on a 4G LTE network with other networks such as 3G being phased out.

"Early on we saw that LTE had significant advantages and it was the technology that was going to win," he said. "It wasn't too long after we made that decision that the industry moved forward in recognizing LTE as the wave of the future."

Like AT&T, Sprint Nextel Corp., the industry's third-ranked company in market share, announced the expansion of its 4G LTE network into five new markets this month, with work under way in nearly 100 more. The expansion gave Sprint a total of 24 markets with 4G LTE, none of which is in New York.

The race for 4G LTE supremacy has heated up in recent weeks thanks to Apple Inc.'s unveiling of the iPhone 5, which features 4G LTE connectivity.

AT&T's announcement of its 4G LTE expansion came less than a week before Apple's Sept. 12 announcement of the new iPhone 5.

Ben Marcello, director of sales for AT&T in Upstate New York, said the timing was a coincidence.

"If we could have done it three months ago, we would have done it three months ago," said Marcello, who works in AT&T's Rochester office. "However, it turns out to be great timing with the new iPhone."

Marcello said that while customers wait for AT&T to roll out 4G LTE, they still have access to HSPA+, the company's alternative to Verizon Wireless and Sprint's 3G service. Marcello called HSPA+ a version of 4G and much faster than 3G. Verizon Wireless officials disputed that, saying 4G LTE is the industry's accepted form of 4G.

Either way, both companies said 4G LTE represents a significant upgrade to anything that has come before it.

Marcello said AT&T is committed to expanding its 4G LTE network in New York by year's end. The company spent $100 million on network enhancements in the state during the first half of the year. Locally, AT&T also opened a 3,000-square-foot retail location in Victor in mid-August.

That AT&T is lagging behind Verizon Wireless in its expansion of 4G LTE marks a change from where the wireless industry was five years ago.

When Apple released the first iPhone in 2007, AT&T became its exclusive carrier in the United States for nearly four years. In 2007, AT&T reported that its revenues nearly doubled, thanks in large part to the iPhone.

Then in February 2011, the iPhone became available to Verizon Wireless customers. Since that time, Verizon Wireless has edged ahead of AT&T as the industry leader.

A report from market research firm IBISWorld Inc. estimated Verizon Wireless had more than 36 percent of the U.S. wireless telecommunications market in 2011. AT&T was second with 32 percent, followed by Sprint with 15 percent.

For some local smartphone users, AT&T's recent 4G LTE rollout may have come too late.

Rochester resident Alex Steiner said he ordered the first iPhone on AT&T on the first day it was available back in 2007. However, Steiner said that with AT&T's service being slow in Rochester, he switched to Verizon Wireless last year.

"The service just wasn't there," said Steiner. "I had a lot of dropped calls, and there were times I couldn't get any service."

When asked if AT&T's recent announcement of a 4G LTE rollout in Rochester would tempt him to switch back, Steiner said no.

"I'm good with Verizon," he said. "I think unless AT&T's service gets real fast real soon in Rochester, you're going to see a lot more people switching from AT&T to Verizon, if they haven't already."

tsmith@rbj.net / 585-546-8303

9/28/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.
 


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