Verizon LTE Worth a Look as Possible DSL Replacement

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As we’ve noted, the rise of LTE opens up the potential for wireless carriers to court DSL subscribers, something Stacey reported on last week with Verizon actively looking to win over wireline customers. Well, even with the limitations of wireless, the comparison is valid, at least for now, according to Deutsche Bank, which studied the latest 4G offerings.

Deutsche Bank’s 4G comparison, reported in a research note today, arrives at some of the same conclusions that Kevin reported on from a RootMetrics user study: that Verizon LTE blows away the other “4G” labeled competition in terms of speed and performance. In a test of 4G broadband laptop cards at eight locations in the Bay Area, Deutsche Bank found average Verizon LTE download speeds were 13.3 megabits per second compared to 2.13 Mbps for Sprint and 0.87 Mbps for T-Mobile. Uploads speeds were 7.37 Mbps for Verizon, 0.49 Mbps for Sprint and 0.58 Mbps for T-Mobile. It didn’t bother testing AT&T, because it didn’t believe the network merited comparison yet.

The numbers underscore the idea that at this moment in time, LTE could be worth a look for existing DSL subscribers. In a comparison of price and speed, Deutsche Bank found Verizon’s LTE service competes well with current wireline broadband offerings from Verizon, AT&T and Comcast.

This isn’t an apples-to-apples comparison, because Verizon caps its $50/month LTE service at 5 GB, which produces the most favorable comparison with wireline services. The $80/month 10 GB plan outstrips the pricing of other wireline offerings. But for a certain subset of people — those who use less than 5 GB of data a month or need both home and wireless data service — Verizon’s 4G service could make sense as a wireline substitute.

“Even if a customer passes the data caps, the service may offer value. For instance, imagine a customer paying for a home DSL connection, yet also needs a mobile internet connection; the additional cost of a DSL line may be more than the incremental cost of using the wireless service at home. Additionally, a customer who values a fast connection at home and does not use more than 5 GB could be enticed by this offering,” according to Deutsche Bank.

Now, this is a snapshot in time. As more users load up on Verizon’s LTE network, speeds will likely fall, while wireline service is likely to keep getting faster. And with fewer bandwidth caps to contend with, wireline still makes more sense as consumers use more data for things like video. Even with faster LTE, it’s not likely to shake up the pricing options of too many consumers. Verizon’s LTE pricing is no cheaper than its wireline offerings. 4G pricing is also unlikely to go down, especially if AT&T’s T-Mobile acquisition goes through and eliminates another possible 4G provider. But the rise of LTE gives us a powerful glimpse at the potential for mobile broadband, especially as users become more mobile. Not everyone needs unlimited caps at home. The allure of super fast wireless broadband speeds could be significant as the distinction between home and mobile goes away.

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