As well as rolling out its Express Network to 29 new markets, Verizon has also become the first US mobile carrier to implement a flat-rate data transmission pricing model. But while Verizon’s first-mover status may allow it to take the lead in the mobile data space, it will soon face strong competition from other carriers’ next generation networks.
Verizon Wireless has expanded its 2.5G network and introduced an unmetered billing plan.
US mobile operator Verizon Wireless has announced the expansion of its ‘Express Network’ to 29 additional markets across the country. With the addition of these 29 markets, Verizon’s Express Network now covers half of the company’s national coverage area.
The Express Network is a CDMA 2000 1XRTT network, with average data speeds of 40-60 kilobytes per second. Its speed capabilities mean that it is classified as a 2.5G network. It is faster and allows more data transfer than previous 2G networks, but is not as fast as future 3G networks will be.
Verizon hopes to use the Express Network to stake its claim to the high volume enterprise market. This aim is apparent in its proposed pricing models, which lend themselves to the enterprise market. Verizon is the first carrier to offer a flat-rate pricing model, a move that will likely be followed by other carriers.
For high-use enterprise customers, Verizon has abandoned the per-minute pricing model and implemented a flat-rate fee of $99.99 per month. Clearly there will not be many consumers that will be willing to pay $99.99 a month for data access. Business users are likely to be heavier users of data and carriers are counting on enterprises to pay for data usage and help them recoup some of their high investment in license fees and infrastructure.
Verizon gains press coverage and first-mover advantage by launching its network now, and its unique flat-rate billing plan will be attractive to some enterprises. However, Verizon will face strong competition later this year when Sprint PCS and AT&T Wireless launch their own 2.5G nationwide networks. It may hold the upper hand now, but that will not last long.
Related research: Datamonitor, 2002: 2.5G Networks and Services