Verizon Wireless has confirmed plans to use Long Term Evolution (LTE) technology as its 4th Generation (4G) technology. Today, Verizon Wireless uses CDMA2000 technology and most of the rest of the world (including Verizon Wireless’ European half-parent Vodafone Group Plc.) uses W-CDMA (also called UMTS) for 3G services. These two technologies are similar but are not compatible.
With this move, Verizon Wireless will have a cellular technology compatibility with Vodafone, thus facilitating better operational synergies for the two companies as well as making it much easier and cheaper for subscribers that travel Internationally between the US, where Verizon Wireless operates, and Vodafones coverage areas in Europe and Asia.
Also, this move could be a blow to Qualcomm, the developer of the CDMA2000 technology, because Qualcomm has a very strong position in CDMA2000 as the primary (only?) chip vendor and holder of the majority of Intellectual Property but has a much less Intellectual Property and marketshare as a potential chip vendor in LTE.
Qualcomm has been working on a rival next generation technology known as Ultra Mobile Broadband, but 3GPP, one of the main standards bodies developing 3rd and 4th Generation technologies, recently selected LTE as its 4G migration path. According to the CDG, there are 400 million CDMA2000 and 21 million CDMAOne (IS-95) subscribers worldwide. Verizon Wireless currently has 64 million subs (mostly CDMA2000) or about 15% of the worldwide base. Losing 15% of the market in the future is significant but even more significant because it may compel other wireless operators to ditch the CDMA2000 4G migration path in favor of LTE. This move also could be a blow to WiMax, a rival 3G technology supported by Sprint Nextel that was recently designated as a 3G technology.
The Verizon Wireless and Vodafone will begin testing LTE technology in 2008 with equipment suppliers Alcatel-Lucent, Ericsson, Motorola Inc., Nokia- Siemens, and Nortel Networks.
It is estimated that LTE would be commercially available in 2010 or 2011 and Verizon Wireless and Vodafone may have a common platform by around 2015 (Note: Telecom doesn’t move that fast!)