Verizon Goes on the Watch List

While I still use Verizon as my wireless carrier, I’d be loath to tell anyone to invest in the company’s stock at this point in time. LTE may prove to be Verizon’s defining event for the next decade, and it’s not going well from most benchmarks.

Before I delve into LTE issues, let’s take a look at the stagnation of FiOS and Verizon’s failure to articulate a policy -- hey, Wall Street, how come you haven’t clued into this – on what it intends to do in territories where it is not deploying fiber.  Major metro areas such as Baltimore will be “digital ghettos” subject to a Comcast monopoly on residential broadband, since Verizon appears to be running its copper infrastructure for cash. In areas where Verizon has FiOS, the company is urging customers to switch because copper is “aging” and “less reliable.”

When Verizon first announced it would build a national LTE network, it promised an early Voice over LTE (VoLTE) rollout and created an LTE development lab.  In the futuristic vision promoted by Verizon executives, LTE would create new business models, such as radios embedded in appliances. An LTE washing machine would enable customers to pay for laundry by the load.

Manufacturers such as LG and Samsung have introduced several generations of “smart” appliances, but I haven’t seen an LTE fridge, dishwasher, or washing machine.  Perhaps consumers around the globe aren’t hip to the concept of a virtual Laundromat in the confines of their own home or manufacturers were considerably savvier to the fact that you needed a single broadband pipe into the home with local devices connected to the rest of the world via a gateway and Wi-Fi or other LAN technology.  Call it the precursor to the Internet of Things (IoT).

Fast forward to 2014, where Verizon’s various allusions to deploying VoLTE in 2013 and early 2014 have solidified to “official” and often repeated announcements of VoLTE by the end of 2014. Meanwhile, the company has backed off on selling LTE-only phones until 2016; previously, Verizon wanted this to happen in 2014.

AT&T and T-Mobile are already rolling out VoLTE, with T-Mobile doing its usual job of first quietly deploying technology and then surprising industry analysts and the media with the scope of deployments. Verizon is trying to beat Sprint to VoLTE – not a pretty picture, given Sprint’s self-inflicted wounds over the past 5 years.

If that wasn’t disturbing enough for Verizon followers, CFO Fran Shammo was talking up LTE to be the platform to delivery video and HD telepresence services at the Oppenheimer Investor Conference earlier this week.

At this point I’ll admit some confusion on my part. Reports link VoLTE deployment to video and other wonderful services, but I don’t know if this is a misstatement with the actual credit supposed to be going to the underlying LTE and IMS infrastructure.  

Regardless of the mechanism and technology, the bigger issues are that broadcast video has not been a big winner in the mobile space to date. There’s a long trail of dead mobile video solutions, with Qualcomm’s MedioFLO flopping and being bought for spectrum.  LTE multicast technology is held out as the Next Big Thing, but it isn’t clear what business models might work or if consumer-driven OTT video access trumps any sort of multichannel video broadcast scheme.

I’m even more skeptical of promises for HD telepresense driven by LTE.  The expense and setup for dedicated telepresence suites has been the playground for large multinational organizations and the Fortune 1000. Again, there is not a lot of details and allusions to conducing HD telepresence across platforms – which smacks of WebRTC more than anything Polycom would call “HD”.

Maybe more information will be available in a month or so at the CTIA wireless show. Or not; Verizon hasn’t given a clear statement on why its VoLTE deployment has been delayed other than “We want it to be as good as CDMA calling”.