Verizon: Aggressive 4G plans won’t increase capex

BOSTON--Verizon Wireless plans to build its long-term evolution (LTE) networks as aggressively as possible but doesn't envision spending a lot of money on it. The money Verizon saves from scaling back its investment in 3G EV-DO technologies will offset its spending on LTE and may eventually result in sunsetting the 3G data network entirely, said Tony Melone, VZW senior vice president and chief technology officer.

Speaking at Ericsson's Capital Market Days event, Melone said Verizon is taking the same approach to 4G as it did to 3G, aggressively deploying it in order to be the first to market. But unlike its 3G build, which saw VZW's capital expenditures increase to 20% of revenues in 2005, Verizon doesn't plan any significant increase in its capex, which stood at just over 10% in the first quarter. Instead Verizon will shift spending on 3G upgrades to the new LTE network at 700 MHz, Melone said.

"It's in our best interest to blanket the country with LTE as soon as possible," Melone said. "[The investment in 4G] displaces what we would have spent on 3G capacity growth. … It won't be a significant blip."

Verizon has selected Ericsson and Alcatel-Lucent to build out the new network and plans to launch two trial markets this year, followed by a rollout in 25 to 30 markets in 2010. Though Melone didn't add any more details to the timeline, he emphasized Verizon would not dawdle. While being the first to deploy a new network would normally be an expensive proposition, the economic efficiencies of LTE make it the cheapest way to add capacity to its network, Melone said. "It's a no-brainer for us to be very aggressive," he said.