Wireless operators’ 4G claims are creating market confusion
The fourth quarter for the mobile operator industry will be characterized by a confusing array of high-speed mobile broadband services, and enterprise and public-safety users will have to make sense of it all.
The term “4G” has now become a muddled marketing moniker. Verizon Wireless will be launching its LTE service this Sunday using the moniker “4G LTE” and will be joining other operators that already have been using the term. Sprint Nextel and Clearwire call their WiMAX offerings 4G, while T-Mobile USA now touts the largest 4G network in the country despite the fact that the technology is based on HSPA+.
All come with different pricing plans, coverage schemes and data speeds. The plethora of options available to users raises this intriguing question: what are you getting when you buy “4G”? Verizon’s early strategy is a bit disappointing, as the company will launch its LTE services with a nice footprint but little innovation in pricing. Verizon is undercutting its own 3G pricing by offering a 5-GB plan for $50 and a 10-GB plan for $80 with a two-year contract and a 4G USB modem.
During a conference call with analysts and reporters, Verizon CTO Tony Melone defended the company’s pricing plans by saying it wanted to come “out of the gate as simple as we could in the initial stages. As the network evolves, other aspects (including pricing) will evolve as well.”
Daniel Hays, partner with global consulting firm PTRM, predicts that branding around 4G will go away and that operators will use more measurement-oriented types of marketing to clearly convey speed and coverage. He likens the situation to that which the PC industry experienced in the mid-1990s when processor speeds began to change, which forced the industry to find a new benchmark for comparing products. Wireless operators may need to move to that level, he said.
AT&T recently released some benchmarking results from Global Wireless Solutions, which monitors wireless network performance, and concluded that it has the nation’s fastest mobile broadband network (which is based on HSPA+). AT&T said that its customers could download an MP3 album more than a minute faster than the next-fastest wireless network, presumably T-Mobile USA, which also operates an HSPA+ network. An 80-MB video file would download about 2 minutes faster (on average) on AT&T’s network compared with the next-fastest network, the company said, adding that the same video file would take more than 5 minutes longer to download (on average) using AT&T’s largest competitor’s network — which you can surmise as being Verizon Wireless’ CDMA EV-DO network.
Hays sees AT&T’s move as throwing down the gauntlet to challenge other operators to demonstrate their advantages, which hopefully will be an advantage to those of us caught in the middle of the mobile broadband marketing wars.
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