Verizon Talks Cellular VOIP

Verizon Wireless chief technology officer, Dick Lynch, has outlined plans to launch mass-market mobile VOIP over the carrier’s CDMA network, with services expected to come online sometime in 2008 or 2009.

This aggressive timetable is made possible by the performance of Verizon’s 3G EV-DO (Evolution Data Optimized) network, said Lynch at a Banc of America Securities LLC conference in New York yesterday (Webcast). Specifically, he linked VOIP to the faster uplink speeds of Verizon’s planned EV-DO Revision A 3G network, which he expects to provide “a peak rate of about 1.8 Mbit/s.”

Cellular operators are traditionally wary of VOIP, as it makes relatively inefficient use of scarce wireless bandwidth compared to today’s voice bearers, which have been optimized over many years for use in cellular networks. These concerns, however, are less acute in higher-capacity 3G networks.

Verizon has committed to spending $1 billion over two years (2004–2005) on its EV-DO network, which currently covers more than 75 million POPs (people) and will be extended to over 150 million POPs by the end of 2005. The carrier originally pitched the network as likely to deliver average downlink throughput of 300 kbit/s to 400 kbit/s. “We’re now telling people that they can expect average throughput of 400 kbit/s to 600 kbit/s,” said Lynch.

Approved by the 3rd Generation Partnership Project 2 (3GPP2) Technical Specification Group, CDMA EV-DO Revision A is a radio network upgrade to existing EV-DO systems based on the earlier Release O standard. Revision A is expected to crank peak burst rates up to 3.1 Mbit/s on the downlink and up to 1.8 Mbit/s on the uplink, using a 1.25MHz channel (see 1xEV-DO Revision OK'd and Nortel Touts EV-DO Rev A).

Verizon will begin field trials of EV-DO Revision A towards the end of 2006. “It’s very safe to say that, from a technology perspective, the following year we’re going to see some real deployments,” said Lynch.

Lucent Technologies Inc. (NYSE: LU) and Nortel Networks Ltd. (NYSE/Toronto: NT) are the primary EV-DO equipment suppliers and therefore are best placed to benefit from the upgrade.

“VOIP is clearly on the evolution path, and it’s a timeframe where I can start doing preliminary design work now,” said Lynch. “I’ve said this to every vendor I can get my hands on: ‘Voice is an application, guys.’ ”

— Gabriel Brown, Chief Analyst, Unstrung Insider