Leading wireless giant Verizon Communications (VZ) has reportedly activated Voice over LTE (VoLTE) service on iPhone 6 and iPhone 6 Plus. With this new feature, customers can now enjoy HD Voice, which offers improved audio quality, on the latest iPhone model.
We believe the addition of the VoLTE feature will be a bonus for the latest iPhone’s users and can potentially be a key factor for driving sales. In addition, Verizon’s offering will ensure a competitive edge against other iPhone6 providers like AT&T, Inc. (T), Sprint Corp. (S) and T-Mobile US, Inc. (TMUS).
Verizon is riding high on increased smartphone sales and the introduction of devices with advanced technology is likely to boost data revenues going forward. During the second quarter of 2014, the company’s smartphone penetration increased to 75% driven by several device launches to lure customers to 4G LTE, which accounts for around 76% of the total data traffic.
The company ended the quarter with 63.5 million smartphone activations, of which 69% were 4G. With approximately 20 million 3G smartphones and over 22 million basic phones, the company expects a further expansion in its 4G smartphone base in 2014.
In addition, Verizon is focusing on enhancing its postpaid tablet base in 2014, which currently stands at over 4 million. Further, Verizon’s planned VoLTE rollout is expected to boost its performance. The first series of handsets will be available by the end of 2014 and is expected to gradually reduce Verizon's reliance on CDMA chipsets, leading to lower device cost. Additionally, voice traffic on LTE will help the company in refarming its 3G spectrum to accommodate LTE and increase bandwidth.
Verizon currently has a Zacks Rank #3 (Hold).
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