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Verizon LTE Worth a Look as Possible DSL Replacement

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 (s vz) LTE download speeds were 13.3 megabits per second compared to 2.13 Mbps for Sprint (s s) 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 (s 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 (s cmcsa).

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.

11 Responses to “Verizon LTE Worth a Look as Possible DSL Replacement”

  1. I don’t see anything replacing my home high speed cable Internet connection any time soon.

    I personally have two Internet plans, Cox cable for home use and a Verizon mobile hotspot smartphone for when I’m on the move.

    The 5GB caps just aren’t practical for most home users to dump their DSL or cable Internet service.

  2. “…as the distinction between home and mobile goes away.”

    This is the point that’s really grabbed my brain lately; and it’s not just the home/mobile line blurring. In fact, a lot of the distinguishing marks of the various tech/telecom providers — whether you get VOIP from your cable company or broadband from Google — are fading as content, voice, and information are increasingly available through the same kind of pipe. You just have to wonder what this landscape will look like for consumers and as a whole when we truly have communications providers, instead of cable companies, phone companies, wireless companies, etc.

    Relevant musing for anyone interested:

  3. Mobutu

    I’m not giving up my fixed line because of reliablity, stability and useability, but if I lived in the boonies and LTE was available, why not get it? It beats dial up.

  4. They are leaving out the biggest player in the US right now for the 4G ISP business, Clearwire. They have plans for as little as $35, for $45, you get no downstream limit (i’ve had speeds of ranging from 3Mbps to as high as 11Mbps uncompressed) and for $60 bucks you get Home with an additional mobile hotspot or laptop wiMax access. There is no data cap on the comparable plans.

  5. Use based tarrif kills this. At $10 per 10GB over that would mean Verizon gets $2 every time you watch an HD Netflix movie (assume 2GB). Consumers would hate this model. You already paid Netflix for the streaming service. You already paid your ISP for the speed/throughput. Now you have to pay more for using what you bought…. Not good.

  6. A few things to point out:
    1) Comcast is cable, not DSL.
    2) Comcast has a 250GB cap, it is not unlimited.
    3) Current pricing models make it prohibitively expensive to use a wireless network as your main connection, as it is extremely easy to burn through a 5GB cap, even with your average consumer.
    4) Since caps have recently become “cool” again, I have yet to see any company increasing them as more bandwidth is added.
    5) Unlike water and electricity, bandwidth caps are priced to discourage maximum consumption (aka use as your home Internet connection) rather than a per-bit basis.

  7. Your last paragraph basically refuted the DB analysis, so why was it headlined as if they have the slightest clue?

    the main point from this piece: never, ever take advice from a bank on technology service or products, or even their analysis of a business. They have a horrible track record of lending money to people who will not be able to pay it back, and that is their supposed specialty. Figuring out what products or services people will buy is way beyond their capabilities.