The largest U.S. telecom provider Verizon Communications (VZ) recently launched a $20 data plan for subscribers in Maryland, Washington, DC, and Virginia. Customers in these regions will now be able to add the 300 MB data plan to their voice service for an additional payment of only $20 per month.
The newly introduced data plan is not restricted to only smartphones. Users can choose from Verizon’s vast range of 3G- and 4G LTE-enabled devices, including smartphones with operating platforms like Blackberry, Android, iOS, Palm and Windows. Customers can also choose the existing data price plans starting at $30 monthly access for 2GB.
The company’s wireless business, a joint venture with Vodafone Group Plc (VOD), remains the market leader in wireless voice and data communication services in the U.S., expanding both its 3G and fourth-generation Long-Term Evolution (4G LTE) mobile broadband network.
Mobile broadband services are currently the industry’s most powerful growth driver. The surging demand for smartphones, tablets and other devices signals a new wave of growth for the industry, keeping Verizon well positioned for expansion. We believe Verizon’s $20 promotional data will attract new customers ready to enter the smartphone market for a cheaper price.
As of July 21, Verizon deployed 4G LTE services in 102 markets, covering 160 million people. By the end of the year, the company expects to expand its services to more than 175 markets covering 185 million people. Additionally, the company plans to expand its 4G network to its entire nationwide 3G footprint by the end of 2013.
To support its 4G services, Verizon launched nine 4G devices, three smartphones, two mobile hotspots, three laptop dongles and one tablet, in the first half of the year. This strengthens Verizon’s competitive position in the highly coveted smartphone market. Driven by the iPhone as well as new LTE handsets, smartphone penetration is expected to increase from 36% currently, to more than 50% by the end of first quarter 2012.
We expect increased penetration of smartphone and other integrated devices to boost data revenue. Moreover, the move toward three tiered-data plans and the discontinuation of unlimited data plan are expected to improve average revenue per user going forward.
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