Verizon Slashes Wireless Broadband Fees

by Gavin O'Malley, Aug 30, 2005, 6:00 AM

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Continuing its aggressive broadband push, Verizon Wireless on Monday announced key expansions into several markets along with a 25 percent cut to its monthly subscription fee. The wireless carrier, owned by Verizon Communications and Vodafone Group PLC, dropped the price of its evolution-data optimized, EV-DO, monthly service fee from $79.99 to $59.99.

At that price point, according to JupiterResearch analyst Joseph Laszlo, wireless service becomes a legitimate alternative to DSL and cable modem, as well as Wi-Fi services. "At these prices, wired broadband services and Wi-Fi now have some real competition," Laszlo said. "Just like people now forgo regular phone service for their cell phones, wireless Internet services will become a more attractive alternative."

EV-DO is deployed over cell phone networks, but is generally reserved for cards that plug into laptops for wireless Web access. It is not to be confused with wireless fidelity, or Wi-Fi, which offers high-speed service, but is restricted to shorter ranges. While Wi-Fi radiates a signal from a fixed transmitter that reaches about 350 feet indoors, EV-DO users can get service anywhere a cell phone signal is available.

Verizon Wireless already offers the EV-DO service in 53 U.S. markets and 57 airports. The seven new markets that were added today include Denver; Charlotte, N.C.; Sacramento, Calif.; Louisville, Ky.; Knoxville, Tenn.; Baton Rouge, La.; and most of the San Francisco Bay area.

The offer is not permanent, and requires a two-year contract available to current and new subscribers. To be eligible, however, customers must also subscribe to a Verizon Wireless voice plan.

The move comes less than a week after Verizon Communications cut fees for monthly broadband Internet service from $29.95 to $14.95.

Verizon also offers a high-speed consumer service, known as VCast, which allows Web surfing and video downloads to cell phones for about $15 per month.

Analysts including Jupiter's Laszlo estimate that while Verizon is about six months ahead of other wireless carriers, Sprint Nextel and Cingular Wireless are racing to catch up.

"Because it was the first to market, Verizon had the luxury of charging a premium for its service," said Laszlo. "But, while Sprint or Cingular won't have that luxury, they'll still catch up at some point."

Sprint Nextel uses EV-DO technology as well, while Cingular employs UMTS, or universal mobile telephone system--which is compatible with most overseas 3G, or third-generation, services, unlike EV-DO. Both Sprint and Cingular charge about $80 a month for plans that are comparable with Verizon Wireless.

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