Verizon Wireless Flicks Content Switch

UPDATED: Verizon Wireless has expanded its third-generation
network and will launch an ambitious multimedia service that’s
heavy on video content, executives announced today.

“This is a defining moment for the wireless industry,” Denny Strigl,
president and CEO of Verizon Wireless, said at a Las Vegas news conference.
“The promise of 3G is finally in consumers’ hands.”

Verizon Wireless’ 1xEV-DO network was activated in San Diego and Washington,
D.C., last year and can now provide coverage in 30 cities — a number that
could double by year’s end, executives said. Just as important, the network
infrastructure is the content that will ride atop it.

Beginning Feb. 1, subscribers who pay the additional $15 per month for the
“Vcast” service will receive unlimited Web browsing, as well as
entertainment, news, weather and sports video programming from major media
outlets.

NBC is tailoring newscasts specifically to Verizon Wireless’ 3G phones, and
MTV will provide the ability to download music videos. A pact with News
Corp. and 20th Century Fox will bring segments of popular TV shows like “24:
Conspiracy.” In all, Verizon Wireless will provide 300 video updates daily.

Most video clips will last between two and five minutes. Verizon Wireless
will also offer additional premium services, such as interactive 3-D
gaming.

Three new phones will be introduced by Verizon Wireless’ handset partners —
LG, UTStarcom and Samsung — with designs that lend themselves to playing
audio and video content. Subscribers will be able to access VCAST through the “Get It Now”
virtual store found on handsets. Pricing has not yet been set for the 3G
phones.

Ken Hyers, an analyst with In-Stat/MDR, said Verizon’s initiative sounds
aggressive and makes sense given the growing appetite for content services
and the growing rivalry with Cingular.

“Consumers seem to be willing to add on more and more fees just for an
extraordinary number of services,” Hyers said. “The typical bill is now $55
and [subscribers use] 700 minutes per month.”

The company, a joint venture between Verizon Communications
and Vodafone , was the nation’s
largest wireless carrier until the recent $41 billion merger of Cingular and
AT&T wireless.

(Strigl and other executives didn’t mention Cingular by name; it was clear
they took satisfaction in rolling out a video content service sooner than
the company that displaced it.)

Now, amid a wave of consolidation, players are investing in network
equipment to increase data speeds and bandwidth with an eye toward new
services that boost customer loyalty and average revenue per user.

Earlier this week, Cingular and Lucent said they had achieved successful
trials of their third-generation wireless network technology,
with data transfer rates hitting “true” 3G speeds.

The companies completed their first High-Speed Downlink Packet Access
(HSDPA) data calls on a 3G Universal Mobile Telecommunications System (UMTS)
during tests in the Atlanta market.

The system delivered data rates of more than 3 megabits per second (Mbps)
and supported streaming video and downloads of high-resolution images and
other large files, the companies claimed. HSDPA has theoretical peak data
speeds of up to 14.4 Mbps.

Usual speed ranges on so-called 3G networks promise bandwidth in the range
of 384 kilobits per second (Kbps) to 400 Kbps when a device is stationary or
moving at pedestrian speed, about 128 Kbps in a car, and 2 Mbps in fixed
applications.

Verizon’s 1xEV-DO technology now boasts data transmission speeds of up to
300 kilobits per second, with bursts of up to two megabits per second.

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