Verizon-AT&T battle over LTE heats up

Editor’s Note: This story is excerpted from Computerworld. For more Mac coverage, visit Computerworld’s Macintosh Knowledge Center.

The nation’s two largest wireless carriers, Verizon Wireless and AT&T, have started what is already becoming a testy, prolonged battle over who will have the first—or best—4G network using LTE technology.

For average consumers, and even for IT managers, much of the rhetoric is bound to be confusing.

Just yesterday, Verizon reminded users that it expects to be running LTE networks in 25 to 30 cities by the end of 2010. The company also disclosed yesterday that field trials in Boston and Seattly have already produced faster than expected average LTE speeds.

After those results were announced, a spokesman boasted that Verizon expects to beat AT&T into the LTE business by 12 to 18 months.

AT&T promptly repeated earlier statements that it plans to begin trials this year and begin deployment of the technology in 2011 when LTE network equipment and devices are expected to be widely available.

“Just because a competitor is in a hurry, that doesn’t necessarily mean they are ahead,” an AT&T spokeswoman said in an e-mail to Computerworld . She noted that AT&T offers its customers “the best of both worlds” with 3G upgrades to faster HSPA 7.2 while LTE develops.

AT&T last week issued 12 separate press releases about 3G upgrades currently underway in four states and various cities. The projects are part of an AT&T plan outlined earlier to spend $19 billion in 2010 on 3G upgrades, 10% more than was spent last year.

For example, one of the 12 AT&T press releases included an announcement that the New York City area will get 40 new cell sites (including some towers) and upgrades of 70 existing cell sites to 3G. AT&T officials had earlier said that parts of Manhattan needed 3G upgrades .

The burgeoning LTE battle expands upon the one played out in recent months via TV ads in which both Verizon and AT&T bragged about 3G coverage.

Based on subscriber numbers, Verizon Wireless maintains a lead over AT&T with 91 million subscribers. AT&T is nipping at Verizon’s heels with 85 million customers.

Meanwhile, third-ranked Sprint Nextel, with about 48 million customers, has started referring to its emerging Wimax network as the nation’s first 4G network.

For average consumers and even IT managers, however, many of the claims about network superiority and the future of 4G, likely means little at this point—could even be downright confusing, analysts said.

“Carriers want to differentiate themselves, but I think all the carrier claims about network superiority are hopelessly confusing,” said Carl Howe, an analyst at Yankee Group. Added Kevin Burden, an analyst at ABI: “It’s even a confusing message for people like me who make their living in this field every day.”

In fact, both analysts said the marketing efforts of both firms appear at least partly to be “purpose-driven confusion” designed mostly to keep customers from switching carriers. The confusing claims don’t let customers realistically evaluate whether one vendor’s network is truly better than the other’s.

The truth is that average customers, and even IT managers who closely monitor such things, can’t easily determine whether billions of dollars spent by a carrier on network upgrades can significantly improve their own use of the network.

Effective wireless reception is governed by how many people are using a single cell tower nearby at a given moment, along with a single phone’s reception capability and nearby obstacles, analysts said. Also, how a phone is used impacts reception greatly—sending e-mail doesn’t really require 3G or 4G speeds, while video streaming and videoconferencing definitely require upgraded wireless networks.

At the end of the day, mobile phone users mostly care about whether their network serves their needs at home, at work, and in between. They don’t care about far off cities that have been upgraded, Howe said. “There’s no research data that shows that consumers buy a wireless network because of its speed, but they do mostly worry if they can place calls and will the calls get through,” he added.

Burden added that most mobile phone buyers, even those using them at large companies, rely on a carrier they have already used and trust when it comes time to buy a new device or renew service.

Therefore, carriers must work to keep their subscriber base intact. Exclusive deals for certain popular phones, like AT&T and the iPhone, have changed the traditional approach to customer retention, giving carriers offering exclusive devices the chance to steal away competitor’s customers, Burden added.

Howe said the recent TV ads claiming the largest 3G network (Verizon’s ads) or the fastest 3G network (AT&T’s ads) probably foretell the company’s plans to sell their LTE deployments. The basic purpose of such marketing efforts is to create an impression that a competitor’s network isn’t as good, he said.

“If you look at this competition rationally—and not a lot of consumers act rationally—so much of the network marketing doesn’t make a lot of sense,” Howe said. “We had a war of the 3G network maps and even maps on top of reindeer. It’s memorable, but does it make sense? No.”

But Howe added, “people don’t buy rationally, and we shouldn’t pretend such marketing doesn’t work.”

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, send e-mail to mhamblen@computerworld.com or subscribe to Matt’s RSS feed.

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