Sidecut Reports

Some quick thoughts and analysis on what may or may not be the final pricing plans for Verizon’s upcoming iPhone and its embedded Wi-Fi hotspot capability — and why we think the upcoming South by Southwest geekfest will be a big real-world test for Verizon’s network capabilities:

Unlimited? Get it While You Can! Despite a lot of wonderfully insightful commentary about why they shouldn’t, Verizon Tuesday confirmed that it would indeed offer an unlimited data plan for the iPhone upon launch — and then immediately backtracked a bit, saying it might only last a little while, whatever that means. As Karl Bode and others pointed out it does make sense for Verizon to offer such a plan chiefly to entice all the folks with older “unlimited” iPhone plans with AT&T to switch and become a new, long-term contract Verizon customer. Our take? If you really want an iPhone from Verizon by all means sign up for the unlimited plan if you can, because it won’t last.

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Before we get into the whole will-there-or-won’t-there be an unlimited data plan for the Verizon iPhone (we stand by our analysis that seems to back up the view that if there is one it won’t be around for long) it’s worthwhile to break out a couple numbers about Verizon’s Long Term Evolution (LTE) 4G network launch from its earnings reports today: the numbers are 65,000 and $1.3 billion.

The former is the number of subscribers Verizon signed up to its nascent 4G LTE service, even though the only devices available are bulky USB modems for Windows-only laptops, and the service has only been available since December. That seems like a pretty impressive debut for what is essentially a beta-type rollout for Verizon, with services still available in only 38 select metro markets as well as 60 airport locations. Looks like Verizon may be tapping right into that sweet spot the launch targeted, which is business professionals. It will be interesting to watch the LTE dongle and portable hotspot subscriber numbers vs. the LTE smartphone subscriber numbers when all Verizon’s announced LTE devices are launched later this year.

The second number, $1.3 billion, is a bit of a window into how much Verizon had to spend in addition to its normal wireless capital expenditures to help launch LTE and get its network ready for the expected surge coming from having the iPhone available. According to Larry Dignan over at ZDNet, Verizon CFO Fran Shammo said that wireless capex for 2010 was up to $8.4 billion, an increase of $1.3 billion over 2009 spending.

“Our capital spending was higher than 2009, driven by 4G LTE deployment and increased 3G network capacity requirements, which included preparing for the launch of the iPhone,” ZDNet quotes Shammo as saying. This is a little different than the answer former CTO Dick Lynch gave us when we asked a couple years ago how much an LTE network might cost — at that time Lynch said that an LTE network could be done “inside our regular [capex] budget.” I guess it helps to be able to throw in an extra billion or so should that “regular” budget need to expand.

With big 4G wireless network promotions coming later this year from leading cellular providers AT&T and Verizon, it still looks like the hardest job is going to fall to the potential next-generation wireless customer — who will be forced to pick and choose from a dizzying array of devices and prices, without much help or guidance from the carriers providing the services.

Two things I read over the weekend reinforced my belief that potential 4G customers are going to need a lot more measurement tools if they are going to make sense of what is coming from the biggest providers. The first was a report on the Boy Genius Report site that purportedly was a precursor of some of AT&T’s forthcoming 4G LTE pricing plans that would include sort of an ad-hoc ability to purchase bandwidth on demand. At the very least, such thinking seems to mean that the days of real unlimited data plans are truly at an end.

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