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Verizon Uptown store manager Isaac Valdez displays a helicopterlike drone equipped with a video camera that users can control from a smartphone or tablet to stream real-time images from the sky. (Dean Hanson/journal)
On a recent Friday afternoon, Verizon Wireless’s Uptown Albuquerque store was teeming with customers mulling over the latest smartphones, accessories and service plans.
The hustle and bustle resembled an Apple store, with an open showroom for customers to sample a broad range of cutting-edge devices and mobile apps. That included everything from a GPS tracker for pets to a wireless wrist monitor that analyzes golf swings for players to improve their game.
Store manager Isaac Valdez said one of the latest products is a helicopterlike drone, equipped with a video camera, that users can control from a smartphone or tablet to stream real-time images from the sky.
“Remote control with smart accessories is enabling some really wild things,” Valdez said. “We offer everything from cellphones to data devices and service plans to go along with them.”
Such advanced technologies are possible thanks to ever-faster mobile broadband networks that Verizon Wireless and other major cellphone carriers are building across the U.S. Increased bandwidth provides the kind of reliable and instantaneous data and voice communications needed to operate new products and services.
That, in turn, is converting smartphones and tablets into catchall remote controls for work and home, with an explosion in consumer demand for all things wireless. And, as the market expands, competition among cellphone providers is intensifying to win over the hearts and minds of consumers.
“The wireless industry as a whole is incredibly competitive,” said Verizon spokeswoman Jenny Weaver. “That’s a good thing for device and operating diversity. It’s what drives innovation and investments.”
Many industry experts say market domination by the nation’s two giants, Verizon and AT&T Inc., stunts competition. But in many respects, consumers are benefitting from the race among wireless providers to build bigger and faster broadband networks, and to entice customers with more-compelling service plans and devices than their rivals.
Workmen Ismael Cortes, left, and Efrain Ruiz-Melendez perform service in a wireless phone tower on April 1. (Dean Hanson/journal)
In New Mexico, for example, both Verizon and AT&T are investing heavily in the latest broadband technology, known as “fourth generation long-term evolution,” or 4G LTE.
Both companies already have extensive, standalone 4G networks, which offer data speeds about four times as fast as third-generation (3G) systems. By adding LTE to 4G, the companies boost speeds to about 10 times more than 3G.
Verizon is the furthest along. It launched 4G LTE in Albuquerque, Santa Fe and Las Cruces in 2011. It’s since expanded to about two dozen urban centers and towns in northern and southern areas through a $75 million investment last year in New Mexico and El Paso.
Nationally, Verizon’s 4G LTE offering is now available to about 273 million people.
“We’ve been aggressive in our rollout,” Weaver said. “We’ll have all of our 3G network at it exists today with 4G LTE by the end of 2013.”
AT&T, meanwhile, invested about $175 million between 2009 and 2012 in New Mexico to upgrade its networks, including about $80 million in Albuquerque, where it launched 4G LTE for the first time in December. The company says it will extend 4G LTE availability to 300 million people nationwide by year’s end.
“We’re actively expanding and enhancing the network (in New Mexico) to increase reliability and speeds,” said Vicki Martin, AT&T vice president and general manager for Arizona and New Mexico.
In addition, AT&T launched two special offers for New Mexico and Arizona consumers this year. Customers whose contracts expire in 2013 can make upgrades in advance without penalties, and those who add a new line for a wireless device will get a $100 discount, Martin said.
On the other hand, despite the 4G LTE race, telecommunications analysts say market domination by Verizon and AT&T is limiting the range of benefits consumers might attain in a more competitive landscape. Those two companies together control about 70 percent of the U.S. market.
Verizon is number one nationwide, with 110 million wireless subscribers. AT&T follows with 100 million. Sprint Nextel Corp. is third with 53 million, and T-Mobile USA fourth with 33 million.
Jan Dawson, chief telecoms analyst at the international research firm Ovum, said most Verizon and AT&T service offerings are very similar, reflecting the limits on competitive benefits from market domination. Both companies, for example, rolled out “shared plans” – which give pools of customers joint access on multiple devices to unlimited voice and text with caps on data usage – within one month of each other last summer.
“Verizon and AT&T seem to move in lock step with one another the way they structure and upgrade plans,” Dawson said. “The competition is less fierce than it appears on the surface, because it’s dominated by these two large players.”
T-Mobile and some smaller, regional companies – such as San Diego-based Leap Wireless International Inc. (Cricket) and Chicago-based U.S. Cellular Corp. – have carved out niches by providing lower-cost and prepaid cellphone alternatives for consumers. But T-Mobile has lost ground in recent years, and the smaller players struggle to keep up with the large ones on services, devices and network quality, Dawson said.
Toni Toikka, president of the Finnish mobile diagnostics firm Alekstra Inc., said the market could benefit from consolidation among some smaller players, such as T-Mobile’s plan to acquire Texas-based MetroPCS Communications Inc., which federal regulatory authorities approved in March.
T-Mobile will gain about 9 million subscribers, plus access to MetroPCS’s incipient 4G LTE infrastructure. And the company is now using its newfound clout to launch aggressive, novel initiatives, such as $100 discounts on Apple’s iPhone 5, monthly rather than upfront payments to buy that phone, and no-contract plans with unlimited voice, text and data usage.
Dawson said T-Mobile’s latest moves might facilitate more intense competition on service plans.
“We’ve seen several shifts in the focus of competition in recent years,” Dawson said. “Before it was all about network coverage and quality, then it shifted to focus on 4G LTE, and now it’s switching to service plans. T-Mobile now says all plans should be unlimited, and that may open up a new battleground.”
