Verizon Planning To Retain CDMA Network For IoT Devices

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Verizon Wireless had been doing out it’s LTE network for a number of years now and it is confident in the new generation network, and technologies such as VoLTE (Voice Over LTE) that it is on track to introduce LTE-only devices early next year. With the introduction of LTE-only devices, this will start to free up Verizon’s legacy network of CDMA towers from handling calls, text messages and data. Given that running this network is not free, because the masts require maintenance and power, one night be forgiven for assuming Verizon is making plans to shut down this legacy network and save costs. However, this is not the case: Verizon’s Chief Financial Officer, Fran Shammo has been speaking at an investor conference this week and has talked of Verizon Wireless’ plans to retain the CDMA network for the foreseeable future in order to handle Internet of Things connected devices. This is in contrast to AT&T’s plans to shut down their legacy GPRS / EDGE network by 2018.

The reason why Verizon are planning on keeping the network is because CDMA is efficient at handling “small bursts” of traffic, such as the type that IoT devices are expected to produce. Fran believes that Verizon’s CDMA network remains a viable long term network and that it “is going to be here for a long time.” There are also cost efficiencies for the network; Verizon’s CDMA coverage is already extensive and will require no roll out in order to maintain this level of service and coverage. It will depend on devices supporting the CDMA standard and this will in turn mean manufacturers and component suppliers will need to maintain an element of backwards compatibility. Given the size of Verizon, this ought not to be an issue in the short term but it may have ramifications going forwards.

To skip back to Verizon’s LTE network, the carrier has continued rolling out the network and with the already announced plans to place more and more customers onto VoLTE, this does mean that the business has a case to refarm some of the existing 1.9 GHz frequency used for CDMA signals for LTE purposes. We may see Verizon carefully balancing their networks across the country and of course, this is an option for the longer term, especially if Internet of Thing manufacturers are not keen to support CDMA networks. Also associated with the roll of high performance LTE networks is the deployment of small cells, designed to boost coverage and available bandwidth in busy, congested areas. It has recently signed a deal for Boston involving a 400 site antenna system designed and built by a third party. Verizon are keen to use third parties to design and built these small cell site systems and Fran compared the deal to be similar to that of their ordinary network masts: “…it’s similar to towers. I don’t own my towers, but I still run my network off those towers. As long as I get the protections in the agreements that I need for the longevity, then it’s a perfect solution for us.” The intensification of coverage in busy areas is an important part of Verizon’s strategy to increase the proportion of connected tablets using their prepaid service, which is currently at 9% but could spike to as much as 50% depending on the source of the data.