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« July 2005 | Main | September 2005 »

August 29, 2005

Verizon Cuts EVDO Prices

By Glenn Fleishman

The Wall Street Journal reports Verizon has dropped EVDO prices: But it’s only for voice subscribers. A two-year contract costs $59.99 per month for unlimited EVDO alongside a voice plan, although this is potentially a short-term promotion. Verizon won’t say. Verizon has well over 40 million voice subscribers. (Voice requirement explicated by Mike Masnick.)

The company is also adding seven metro areas today to its EVDO footprint: Denver; Charlotte, N.C.; Sacramento, Calif.; Louisville, Ky.; Knoxville, Tenn.; Baton Rouge, La.; and most of the San Francisco Bay area.

But once again, Verizon Wireless characterizes this as an us against Wi-Fi proposition. “This will hit dead-on-site against the Wi-Fi ‘hot spot’ phenomenon,” said John Stratton, vice president and chief marketing officer for Verizon Wireless.

Verizon is doomed to fail in this strategy. EVDO speeds are a fraction of professionally run Wi-Fi hotspots: typically 1/2 to 1/10 the normal speed (not burst speed) for downloads and a whopping 1/5 to 1/50 the upload speed—the high-end being T-Mobile and other services T-1 service that offers symmetric 1.5 Mbps.

EVDO backers will tell me that EVDO service speeds are per user, while Wi-Fi users share a pool of bandwidth, and as Wi-Fi becomes more popular in any given spot, bandwidth decreases. Which assumes that a profitable, high-use Wi-Fi service wouldn’t increase its bandwidth when 6 Mbps DSL is available in most urban areas at a reasonable cost.

Verizon Wireless is competing against Blackberry, other 3G services, and the value of time for business travelers. With Wi-Fi in most airports now, and wired and wireless services included in usage plans at virtually all business hotels, EVDO isn’t a necessity for most travelers. EVDO assumes you want to work everywhere; Wi-Fi hotspots assume you want to work in places that are designed for you to work in.

Posted by Glennf at 11:24 AM | Comments (0) | TrackBack

August 28, 2005

Verizon May Cut EVDO Prices 25 Percent

By Glenn Fleishman

Reuters reports that Verizon Wireless is about to cut unlimited BroadbandAccess to $60 per month: The service, which includes unlimited 1xRTT (national) and 1xEV-DO (where available), currently runs $80 per month. Sprint Nextel is offering EVDO, and both companies will have a similar scale of footprint and a large overlap by early 2006.

It has long been said that Verizon was pricing EVDO so high because it could and because it needed to: it was unclear how such a deployment would work and, if it had initial massive uptake, whether systems and spectrum could handle it.

With many months of commercial testing and significant tests in trials before that, Verizon must be ready to cut gross margins to increase overall revenue. This cut makes EVDO even more competitive from the price perspective against Wi-Fi plans.

I have written for years about the three dials for mobile Internet access: ubiquity, speed, and cheapness. You can twiddle those dials all you want, but you can’t turn all three of them to full power yet. Future cell standards (HSDPA, etc.) and continued metro-scale Wi-Fi deployment with roaming coupled with mobile WiMax’s emergence in two to three years will create head-to-head competition, convergence, and co-opetition. [link via Engadget]

Posted by Glennf at 2:59 PM | Comments (0) | TrackBack