The operator tries to climb back to No. 1 with a major expansion of its high-speed network and a new mobile TV service.
Verizon's BroadbandAccess wireless Web service, whose performance matches a slow wireline broadband connection, is now available in 32 markets, having been expanded Friday to Chicago, Boston and 10 other cities. By year's end, the operator expects the network to be available to 150 million Americans, making it the largest third-generation, or 3G, network in the United States.
Verizon is trying to take advantage of a major weak spot of new No. 1 cell phone operator Cingular Wireless--the relatively paltry reach of its wireless broadband network. Cingular--which overtook Verizon as the largest U.S. carrier when it purchased AT&T Wireless last year--offers 3G service in just a half-dozen cities.
"This is not a plan for services on the horizon, this is about now," Verizon Wireless CEO Denny Strigl said in a statement.
Wireless broadband subscriptions is a new market for U.S. carriers, which are losing revenue; years of hypercompetition have driven down the cost of cell phones and voice calling minutes. But U.S. sales of such wireless baubles have been disappointing because, unlike in Asia and Europe, Americans are more apt to turn to their PCs to cruise the Internet. While both Verizon and Sprint say wireless data sales topped $1 billion last year, the revenue falls far short of that pocketed by carriers outside the United States.
Figuring content will jump-start the market, on Feb. 1 Verizon Wireless will begin selling V Cast, which the operator claims is the first multimedia service designed for third-generation cell phone networks, such as the one supporting BroadbandAccess. V Cast subscribers can choose from 300 shows, with the programming lineup centered on what Fox programming honchos have dubbed "mobisodes," specially made shows for the cell phone's small screen and limited processing prowess. V Cast's lineup includes a version of Fox's popular "24" (without star Kiefer Sutherland) and other mobisodes from Comedy Central, MTV and NBC News programs. Subscribers also get a new array of three-dimensional games and music videos.
As telephone industry analyst Jeff Kagan pointed out, what consumers get is not "mobile TV" per se. Rather, customers select what they want to see, push the button, it buffers for a few seconds, then the playback occurs. "It's like watching loads of short, high-quality bursts of information in a variety of areas," Kagan wrote in an e-mail.
Verizon's new service will challenge one offered by rival Sprint, the nation's third-largest carrier, which recently announced its intention to merge with Nextel Communications. Sprint began selling a mobile TV service a year ago.
According to market analyst In-Stat, cell phone video services in the United States generated $32.7 million in revenue in last year. That could more than quintuple over the next four years as carriers like Verizon Wireless enter the market, higher-speed networks that make the services more palatable are expanded, and handsets with video players become more widely available.
"TV in a handset is a whole new paradigm," said Bill Krenik, manager of wireless advanced architectures at Texas Instruments, which supplies chips for cell phones. "The whole face of TV is likely to change. On your living room TV, prime time is at night. Prime time on a mobile phone might very well be commutes."