Verizon cuts 3G prices, finally gets San Francisco

Verizon Wireless today kicked off what may be the first pricing war for 3G data in the U.S. and announced it has added to its growing EV-DO footprint five new markets, including San Francisco, one of the last major holes in its nationwide coverage of metro cities.

Verizon announced it would now charge $60 a month for business-focused laptop-connectivity service Broadband Access service to any customer with monthly voice plan. The price is 25% lower than the $80 price it used to charge and what Sprint currently charges for unlimited data over the EV-DO network. Since the services are still in their infancy, the price shift is unlikely to set off any major war competition between the two carriers, but many analysts have predicted that as the prices for wide area wireless data fall to levels comparable of hotspot services ($30-$40) a month, uptake will increase.

Verizon new launch in San Francisco was long awaited as it has scrambled to get licenses in the very tech-savvy but spectrum scarce area. Earlier this year, Verizon acquired a critical 10 MHz of PCS spectrum in the Bay Area from Metro PCS for $230 million, giving it the additional channels it needed for a launch of its consumer V Cast and business Broadband Access service. While the operator has yet to announce coverage rollouts down to the tech corridors of Silicon Valley, it launched an EV-DO node in the San Jose airport this summer. Verizon also launched 3G services in nearby Sacramento as well as Denver; Charlotte and Raleigh Durham, N.C.; Baton Rouge, La.; and Louisville, Ken.

San Francisco may become one of the hottest 3G markets in the country as it is one of the few markets where all three Tier I 3G providers have rolled out services. San Francisco was one of the first markets to get 3G when AT&T Wireless rolled out UMTS services there last year (the operation of which has been assumed by Cingular). Sprint is in the process of rolling out EV-DO service to 34 markets this quarter, and though it won’t list off specific markets that will receive the service, its coverage maps online show current deployments in the San Francisco and Oakland airports as well as wide swathes of coverage in nearby Sacramento. Those maps also show that Sprint plans future coverage of the entire San Francisco Peninsula and the East Bay.

Verizon definitely has the lead of Sprint in markets deployed with 61 metro areas in it 3G footprint. Sprint, however, has promised to even up the gap by the beginning of 2006, when both carriers say they will have half of the U.S. population covered by EV-DO. But in remarks issued with Verizon’s announcement today, Verizon Wireless vice president and chief marketing officer John Stratton took an oblique shot at Sprint’s rollout strategy, which is focusing on central business districts and downtown areas. “Our customers don’t have to wait until next year or whenever for wireless broadband to be available—let alone only in business corridors,” Stratton said in the statement.

Verizon’s own coverage in San Francisco is puzzling. In its online network maps, Verizon shows 3G coverage from San Jose (a market it has not yet announced) all the way up the bay, but stopping just short of the top of peninsula—where San Francisco’s downtown business district lies. Along with Manhattan, San Francisco’s downtown is one of the densest urban areas in the U.S., and limited spectrum may be forcing Verizon to phase in EV-DO to the city proper.