Independent testing of Verizon Wireless’ recently launched BroadbandAccess 1x EV-DO network found that while the service fell short of the multi-megabit speeds often used as marketing hype, the service consistently delivered speeds in line with what both the carrier and its infrastructure providers said customers should expect. Testing also said the EV-DO service provides an alternative to traditional wireline broadband services.
RBC Capital Markets tested the service in 20 locations throughout the San Diego area. RBC said tests showed consistent network speeds in excess of 300 kilobits per second, and speeds greater than 350 kbps in 78 percent of the tests. Verizon Wireless said consumers should expect network speeds between 300 and 500 kbps when it launched the network in San Diego and Washington, D.C. late last month.
RBC analyst Jonathan Atkin said the results were more than three times faster than the 90 to 98 kbps speeds provided by Verizon Wireless’ recently renamed NationalAccess 1x-based network, which RBC tested concurrently using a separate laptop computer, and proved comparable to broadband services.
“In light of this performance, we believe that a properly engineered 1x EV-DO commercial network can deliver broadband throughputs competitive with DSL or cable modems with the added benefit of allowing for mobile access across the wireless coverage area,” Atkin said.
Atkin added that Verizon Wireless’ 1x EV-DO results were also more consistent than a similar private network deployed in the Midwest last year that when tested delivered 300+ kbps speeds only 50 percent of the time.
In addition to testing network speeds, RBC noted sales representatives at Verizon Wireless stores in the San Diego area were knowledgeable and well trained about the BroadbandAccess service and that it required less than 10 minutes to install and set up the wireless PC card and software.
In addition to providing a compelling DSL alternative for consumers, Verizon Wireless’ 1x EV-DO network could put substantial pressure on GSM-based carriers that are expected to launch EDGE data services later this year with top speeds of between 75 and 150 kbps, Atkin noted.
“We view these results as incrementally positive for CDMA carriers should demand for broadband speeds on a mobile network materialize as we believe the GSM carriers will be challenged to match such results on a cost effective basis,” Atkin said.
Cingular Wireless L.L.C. launched an EDGE network trial in its Indianapolis market this summer, but recently noted the testing has been hampered by the lack of devices beyond Nokia Corp.’s 6200 handset, which is not designed to take advantage of the increased network speeds available with EDGE. AT&T Wireless Services Inc. is expected to launch EDGE services nationwide by the end of this year, while T-Mobile USA Inc. has yet to disclose an EDGE launch timeframe and has instead been touting its Wi-Fi based HotSpot service.
While Verizon Wireless clearly has a competitive advantage in network speed, others note the carrier’s pricing strategy could prove to be the most compelling aspect of the service as Verizon Wireless priced the BroadbandAccess service at the same $80 per month for unlimited access as its 1x-based NationalAccess service.
“The most significant component to Verizon’s launch is not its speed, but that the carrier is offering this service at the same price as its 1xRTT-based NationalAccess network and is on par with its competitors’ unlimited data pricing,” said Jeffrey Rickard, wireless industry analyst at Current Analysis. “While the launch of this service should have been well-anticipated by competitors, few anticipated pricing below the $100 per month for unlimited usage.”
Sprint PCS charges $100 per month for 300 kilobytes of data transmission for its 1x-based Vision network, while slower GPRS-based offerings from Cingular, AT&T Wireless and T-Mobile USA range from $30 to $80 per month for unlimited access.
Rickard added that the combination of network speeds and competitive pricing should provide Verizon Wireless with momentum in the enterprise space heading into the implementation of wireless local number portability on Nov. 24.
“Enterprise customers will certainly be interested in this new solution and are likely to perceive Verizon Wireless as the clear market leader for enterprise solutions as a result,” Rickard said. “Simply put, until competitors can catch up, they’ll all be behind Verizon.”
