Verizon switches standards gears for next-generation network

Verizon Wireless is shaking up its technology plans for the second time this week.

Two days after the company announced plans to and applications, it announced plans to switch gears when it comes to future networking technology.

Verizon Communications and Vodafone, joint owners of Verizon Wireless, plan to use the LTE (Long Term Evolution) standard backed by GSM industry players rather than the UMB (ultramobile broadband) standard backed by Verizon's current partners.

There's a host of implications for the industry, but for the phone user, the impact is simple. Right now, if you're a Verizon or Sprint customer, and you want to travel to many parts of the world, you'll have to get a rental, if you want to make calls while you're there. The move toward LTE would bring Verizon into the GSM world and enable travelers to use their phones around the world (for a hefty fee, of course).

In some ways, the move makes a lot of sense, and Verizon CEO Ivan Seidenberg hinted that this was coming a few months ago.

The GSM family of standards is used by about 80 percent of the world's mobile phones--and by major carriers such as AT&T, T-Mobile, Vodafone, and virtually every other European carrier. If Vodafone is already planning to head down the LTE path for its own networks, it's natural that Vodafone would nudge its subsidiary down a similar path so they could share expertise and get better deals on equipment from companies like Alcatel-Lucent and Nortel Networks.

But Verizon currently uses the CDMA (code division multiple access) standard for its networks. CDMA is used by Sprint, and it's popular in Asia. It's also controlled by Qualcomm, which owns patents on the CDMA technology and runs a very lucrative business in licensing that technology to carriers and phone makers.

This is going to take years to play out. Don't expect to see LTE networks and phones for at least two to three years, said Avi Greengart, an analyst at Current Analysis. All Verizon said on Thursday is that, along with Vodafone, it plans to start testing the LTE equipment in 2008.

But if the companies follow through with plans to deploy the LTE networks, it could be a blow to Qualcomm's future business. Sprint's 4G plans are very much up in the air. It had originally announced its intention to use WiMax technology for its 4G network, but after sacking CEO Gary Forsee, the company is re-evaluating its plans.

At peak rates (which are rarely reached in the real world), LTE networks will let you download data at a whopping 100 megabits per second, compared to the 1Mbps or so that you'll get from a 3G EV-DO connection on Verizon's network at the moment, or a 1.5Mbps DSL connection at home.

In a press release announcing its decision, Verizon noted that this type of bandwidth won't just be for cell phones. "Discussions with device suppliers have expanded beyond traditional suppliers, such as LG, Samsung, Motorola, Nokia, and Sony Ericsson, as consumer electronics companies anticipate embedded wireless functionality in their future products."