Uncovering the U.S. LTE 'conspiracy'

The long-term evolution (LTE) club added a few members last week at Mobile World Congress with SK Telecom (NYSE:SKM), Telstra, Telefonica (NYSE:TEF) and a handful of smaller operators announcing plans to roll out commercial LTE networks this year and next. At that pace, the “long-term” in LTE is quickly becoming a misnomer—or at least that’s what I’ve been foolishly led to believe.

But according to a many of the European media I spoke with in Barcelona last week, LTE is just as long-term as its name implies and Verizon’s heralded early launch of a large-scale LTE network is a marketing myth.

I’m not kidding here. I heard from several European colleagues—and even an American one—in the press and blogger corps that LTE is still at least a year or two away from every seeing daylight in a live network and that what Verizon Wireless (NYSE:VZ, NYSE:VOD) has deployed is not a “true” commercial LTE network but a limited trail at best. Further, and contrary to published launch dates, these doubters contend that the first LTE smartphones won’t be available until 2012 or 2013.

I’m not going to call anyone out—these are people I respect and they’re entitled to their skepticism—but I was a bit shocked at how deep this belief ran. These journalists cited European industry sources and relayed first-person accounts from fellow journalists in the U.S. I came off as some sort of Verizon booster or apologist when I tried to explain that these networks really did exist and to the best of my knowledge were working as advertised.

Maybe I am the dupe here. I’ll admit that at times operators have pulled the wool over my eyes no matter how closely I follow the industry (for instance: T-Mobile’s HSPA+ phone really isn’t an HSPA+ phone--go figure). U.S. operators probably haven’t done much to defend themselves from such innuendo, given how they’ve slapped the term 4G on whatever network they happen to have handy. But a complete hoax? Even I’m not that gullible.

I’ve tried out VZW’s LTE network a few times here in Chicago, and for the last three weeks my editor has used an LTE data stick to entertain himself on the commuter train between downtown and whatever far flung suburb he lives in (Editor: yes I can vouch for this – and unless Verizon has rigged its VZW Navigator software, the connection description and speeds do seem to indicate the service is running on its LTE network). I haven’t seen a commercial smartphone yet, but Verizon has promised a few by the second quarter. So far it’s kept all of its promises about the LTE network. I have little reason to doubt it on this one.

So why the disbelief across the Atlantic? I would chalk it up to a few things:

1) We Americans tend to be slow on the uptake. We’ve been behind on almost every major wireless trend, whether it’s SMS, the launch of 3G networks, or the adoption of mobile data services. It took the iPhone to set us on course. With that kind of history, it’s easy to see why outsiders looking in would fail to appreciate why U.S. operators are moving so quickly with LTE. What they don’t realize is that U.S. operators had to move quickly. Verizon and Sprint (NYSE:S) were running out of rope with CDMA, while European operators still have plenty of network tweaks left in their high-speed packet access (HSPA) toolkits. The fact that U.S. operators are hyping ‘4G’ well ahead of any real LTE network probably doesn’t give the U.S. much credibility. From Europe’s point of view, we Americans are just pretending to have next-generation networks. The exception, Verizon, gets lost in the noise.

2) The timing was a bit hard to believe. Verizon committed to LTE even before the standard was finalized and laid out a roll-out schedule that was optimistic by anyone’s standard. Frankly I’m still shocked that Verizon CTO Tony Melone pulled it off on schedule and to such scale. This is the telecom industry—nothing ever gets built on time and if it does it’s usually a half-measure accomplishment. You can’t really blame people for being skeptical of such a high-profile launch of new technology on schedule. After all, this industry is infamous for missing deadlines. The reason VZW was able to pull it off was probably sheer scale, which I’ll address in my next point.

3) There was little LTE handset buzz at MWC. After the slew of LTE devices unveiled a CES, there was barely a one at MWC, the premier global wireless event, probably because most global operators aren’t focused on LTE just yet. Without any handset hype it’s easy to get the impression that a robust LTE service is years off. Handsets tend to trail commercial networks by at least year, and that raises the question of how VZW is able to secure them so quickly. TeliaSonera launched LTE over a year ago, and it doesn’t have a handset to its name. The difference is Verizon has scale that no European operator can achieve. Its initial LTE launch covers 110 million pops, nearly double the size of any individual European country’s population, save Russia’s. With that kind of scale, VZW can force the handset issue in ways no individual European operator can. But even then, device vendors seem to be keener on supplying the market this time around. For instance, MetroPCS (NYSE:PCS) has been able to secure two LTE phones for its much smaller launch.

In any case, I’ve given you what I deem the most plausible explanations of the disconnect between perceptions on either side of the Atlantic. But perhaps I’m just drinking the Kool-Aid.

How about Verizon? Care to give us a definitive answer? Are your LTE networks just smoke and mirrors?