Verizon Looking to Fill Empty LTE Network, Says DJ

Dow Jones Newswires’s Greg Bensinger this afternoon offers the findings from an interview with Verizon Communications‘s (VZ) chief technical officer for its wireless unit, David Small, in which it becomes clear that the company’s fastest cellular network, built on so-called long term evolution, or LTE technology, is vastly underutilized.

Although Verizon can reach about 200 million Americans with LTE, just 5% of its customers are currently using it, writes Bensinger. Verizon’s LTE coverage is ahead of the 75 million to 80 million Americans that AT&T (T) has covered with LTE.

Small tells Bensinger the company will reach 260 million Americans by sometime in 2013, up from the carrier’s prior estimate of 250 million.

“Trying to get more LTE devices on the network makes sense since its LTE network is fairly empty,� Drake Johnstone with Davenport & Co. tells me in a phone conversation this afternoon.

“They are getting no competitive edge to the extent they compete with AT&T just on their 3G service.”

AT&T’s GSM-based 3G service is generally regarded as faster than Verizon’s non-LTE service.

Johnstone, like many others, expects Apple�s (AAPL) next iPhone, which may be out this fall, will have LTE connections. That could help with Verizon�s effort, he thinks.

Johnstone has a Neutral rating on shares of Verizon based on valuation. He prefers shares of Vodafone Group PLC (VOD), which owns almost half of Verizon Wireless, as a better way to play the wireless unit’s success, given that Vodafone shareholders receive dividends from Verizon.

Analysts I’ve spoken with expect Verizon will spend $2 billion on LTE build-out this year.

I wrote in ! this wee k’s Barron’s magazine, in the Tech Trader column, that Verizon and AT&T and others rolling out the technology want to increase usage but also don’t want to risk disappointment by customers.

One telecom analyst, Jennifer Fritzsche with Wells Fargo, described Verizon’s LTE network to me by saying “It’s a big, shiny, empty network at this point.”

Previously:4G Phones 35% of Smartphone Sales in Q4, Says NPD, March 13th, 2012.

Fin

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