VZW's future network

CTO Dick Lynch discusses how Verizon Wireless isn't changing its business model, but pursuing two separate ones.

Next year, Verizon Wireless will be a distinctly different operator than it is today. Within the last two weeks, the company has been dispelling its own stereotypes. Known as the most closed carrier, VZW just committed to an open access network where a customer can register any device that meets the carrier's basic connectivity requirements. Also known as a CDMA loyalist, VZW broke ranks with that camp, opting to pursue the GSM community's long-term evolution technology for 4G.

Is VZW changing heart on the business model and technology that has made it the largest carrier by revenue in the U.S.? Or is it developing a dual personality? According to Dick Lynch, executive vice president and chief technical officer for VZW, it's neither. In fact, Lynch said it is doing nothing abrupt or even surprising — it's merely following the changing currents of the wireless business.

“You have to understand our philosophy,” he said. “We're a company of pragmatists here. We have to keep evolving our business model as the industry evolves.”

The so-called “walled garden” for which VZW is infamous has served its customers well since the inception of wireless data services, Lynch said. It has offered its customers a trusted and easy way to access mobile applications and content, and the carrier has no intention of abandoning that model, Lynch said. Instead it will run a parallel complementary business model that meets the needs of customers who no longer need hand-holding, he said.

The same holds true for technology, Lynch said. VZW still has an affinity for CDMA technology for delivering voice services and light broadband connectivity, Lynch said, but the next-generation network is not a voice network — it's an IP data network. In that world, the CDMA-migration track loses its advantages. The 3GPP2's 4G alternative ultra mobile broadband is evenly matched with LTE in performance, Lynch said, so Verizon can base its choice on LTE's global economies of scale rather than on technology.

“I happened to be the one to make the CDMA decision originally,” Lynch said, referring to VZW precursor Bell Atlantic Mobile's first adoption of CDMA. “It's still the right decision. CDMA has worked well for us and will continue to work well.”

Many people in the industry will look at VZW's decisions as straying from its core principles, but then all businesses must occasionally re-evaluate their basic business models if they don't want to remain static, said Peter Jarich, wireless infrastructure analyst for Current Analysis.

“If you want to look at Verizon Wireless as the 3GPP2 loyalist that moves slowly on devices and has a big walled garden, then yeah, this is a departure,” he said, “but if you look at Verizon as a pragmatist that knows where the business environment is going, then this fits perfectly.”