Dick Lynch: 4G equipment trials this year,
infrastructure in operation 2010-11
Talk to many financial analysts and you'd think that Verizon
Wireless and Vodafone were locked in an unhappy marriage that
both were seeking the most opportune time to end.
Vodafone owns a 45% share in Verizon Wireless, and has done
for years. Yet some shareholders have from time to time called
on Vodafone to sell its stake and give them the money.
Meanwhile the Verizon group has sometimes seemed uncomfortable
with the idea that a UK company owned such a big chunk of its
The idea of an estrangement has been strengthened by the fact
that the two companies have always used different
Vodafone is a GSM company, through and through. It was one of
the founders of the project to develop the Europe-wide mobile
that has now spread around the world. Verizon Wireless, on the
other hand, has always been a CDMA operator. It chose a
different technology, promoted by US vendor Qualcomm, for good
reasons, but CDMA never really took off internationally despite
"We have been a CDMA carrier since I made that decision back in
the early 1990s," says Dick Lynch, CTO of Verizon Wireless and
— since mid-2007 — CTO of the whole Verizon
"As a result of that we've always been 18, maybe 24 months
sooner to market with product than the GSM path has allowed
for. So we've had a 3G network here in the US for a
considerable period of time now, and we've been very successful
with it. We've had customers who have come to us because of
For years Vodafone and Verizon Wireless have followed the
evolution of their technologies, from the original 2G (the
first generation was analogue) to 2.5G and now 3G. Verizon went
with Qualcomm; Vodafone took the GSM route, though that also
now uses CDMA encoding in its 3G networks.
And at the end of November 2007 Vodafone and Verizon Wireless
announced their allegiance to a joint 4G strategy. They will
work on the GSM industry's project, called LTE, or Long Term
Evolution. Verizon Wireless will not work on Qualcomm's own
in-house 4G technology, Ultra-Mobile Broadband or UMB.
That doesn't put Qualcomm out of the picture. Verizon
Wireless's 3G services will continue for many years, and
Qualcomm has already announced that it is working with GSM
companies on LTE.
But it means Verizon Wireless, with 65 million customers in
the US, and Vodafone, with 252 million proportionate customers
around the world, will be the most powerful force worldwide in
the development of LTE.
The 300 million supergroup
That Vodafone number, for the end of 2007, will include
about 30 million representing a 45% share of Verizon Wireless's
user base. But even so, the effective total size of this
supergroup is just a shade under 300 million — more
than one in 10 of the world's mobile market.
The two partners will work with a number of network suppliers,
including Alcatel-Lucent, Ericsson, Motorola, Nokia Siemens
Networks and Nortel, in a trial due to begin this year.
So when Lynch and his Vodafone opposite number, Steve Pusey,
walk into meetings at Nokia Siemens Networks in Espoo, or
Ericsson in Stockholm, or Motorola in Chicago, executives take
notice and, no doubt, stand to attention.
Device suppliers such as LG, Samsung, Motorola, Nokia and Sony
Ericsson will also take notice of Vodafone/Verizon Wireless
decisions. And not just makers of phones, PDAs and
For, according to Lynch, it's the wider market for
wirelessly-enabled electrical goods that he has his eyes
Of course, there's a roaming side to the decision. As
border-hopping Europeans and Asians know to their cost, GSM
operators worldwide earn considerable revenue when
international travellers roam onto their networks, or when
their own customers travel abroad and pay to receive calls on
their mobile phones.
Because of Verizon Wireless's technological isolation in the
Qualcomm world, that revenue has been largely denied to it.
Vodafone and other GSM customers visiting the US roam onto
AT&T or T-Mobile, not to Verizon or the other large CDMA
operator, Sprint. Verizon customers must acquire special phones
if they need to stay in touch away from home.
"I started thinking, and looking through my window at the
trees, and seeing airplanes go by, and these airplanes all say
British Airways on them, or they say Lufthansa," says
"So as we become more and more a worldwide economy we really
need to think about the universality of the technology we're
But there's more. "I look at where we're going to get our
devices from in the future," says Lynch. "I became convinced
that I couldn't sell what we sell in the 2G and 3G world today
in the 4G world. What we're really going to sell is capability
for the consumer electronics industry to provide embedded
wireless in all of their devices."
Consumer electronics companies already enough variables to
cater for with mains power, he says. North American and
Japanese mains sockets deliver 110 volts at 60 hertz; in Europe
and many other parts of the world it's 230 volts and 50 hertz.
And that's without the many different designs of socket.
"They don't need more variants," says Lynch. When they decide
to embed wireless technology in their devices, they will want a
standard that is available in as much of the world as
"What I wanted to do was given them an opportunity to see that
companies like Verizon and Vodafone and others have coalesced
on a given 4G technology so that know what they need to build
There were several alternatives to LTE, he says. Apart from
Qualcomm's UMB there is WiMax, which Sprint is adopting for its
Xohm service, expected to be rolled out commercially later in
All three are similar technologies, each using a system called
OFDM, for orthogonal frequency-division multiplexing. That
means no single existing technology has a natural upgrade path:
for everyone, it's a change of generation.
So Lynch compared the alternatives. "As a technologist I said,
give me a comparison of the three. From a technology
comparison, you find that all three to the eyes and ears and
feel of the customer are virtually identical. One has a little
bit faster downlink speed, another might have a little bit
lower latency, but in the end all three of them are very close
So the opportunity for a world standard for 4G wireless,
putting Verizon at the heart of the LTE movement in association
with Vodafone, came to the top of Lynch's priorities.
The decision was recent, made during 2007 "as I understood all
the various implications of the need for me to make such a
decision", he says. "We came to that conclusion over a period
of six or nine months before we made the announcement."
Now, he says, "I am very high on the opportunity of 4G. The
reason I believe so strongly in 4G and its opportunity is
because of the success we've had with 3G in this country. If we
can do this with 3G, then what could we do if we had a
technology that could be 10 times 20 times faster, had better
latencies, was readily available to the consumer?"
And this is where the logic of his move from Verizon Wireless
to the whole of Verizon becomes apparent. For a wireline
provider, "4G really provides us with the opportunities to
converge our services so that the customers can see the same
thing on their screen, whether it's a wireless laptop or on
their television set or wherever", says Lynch. "You can see I
get really excited about the opportunity."
Economies of scale
So do consumer electronics companies as well. "They have
conceptual product in their development funnels now," and they
have been making the point that they wanted the economies of
scale associated with putting in the same standard for Europe,
Asia and North America.
This also fits in with Verizon Wireless's new open development
initiative, which is designed to create an opportunity for
independent vendors to design and sell terminal
In the CDMA world, more than in the GSM world, customers have
had to buy their phones and laptop data adapters directly from
network operators or other approved vendors. Verizon's strategy
is intended to break that link.
"We have determined that the consumer wants to be able to
bring speciality devices, unique devices that we may not sell,
to our network, and utilise them on our network," says
Verizon announced its ODI just a few days before its LTE
collaboration with Vodafone, and Lynch confirms that they are
"The majority will still buy devices and services directly
from us," he says. But there will be "specifications to which
anybody who wants to build a device can look and comply", and
Verizon will accept that such equipment is "safe on our
network", so that customers "can do what they what they want
the device to do".
ODI will start with Verizon's existing 3G network, but "I want
to tell potential customers and potential providers of
equipment about when we get to 4G and that LTE is the
technology we'll be using".
So what sort of equipment is he thinking of, for the ODI in the
3G world and into the LTE world with Vodafone, apart from
today's phones and laptops?
"When I say consumer electronics I'm talking about cameras that
will have all the download capability for all the digital
images that the camera will have taken," says Lynch.
"I'm talking about automobiles that will have tremendous
amounts of capabilities beyond what are provided today. I'm
talking about game consoles — any type of consumer
electronics device that can benefit directly or, through
additional functionality, benefit indirectly from a wireless
connection on it."
He's not particularly focussed on phones and PDAs, or laptops
and smart phones. "Will all of those play on 4G networks? They
certainly will," he says. "But that's more business as usual.
I'm looking to stimulate the new business."
If Lynch's decision to go for CDMA for its 3G strategy gave him
an 18-24 month advantage, will opting for LTE lose that
advantage. "There's less of a time differential, in my opinion,
for the 4G technologies than there has been in the past," he
says. "While there may still be a little bit of time-to-market
benefit with the other technologies I believe that all the
other reasons I gave speak to waiting for LTE."
So where are we and when will we see LTE? "We plan, working in
conjunction with Vodafone, to do network equipment trials,
infrastructure trials, on both continents, this year, 2008,"
Some will be Verizon's traditional suppliers, some will be
Vodafone's traditional suppliers, "and some that neither one of
us is using", he adds. "We plan to do that this coming
Next year he expects to see initial devices, and will want to
see how they work, and "how the network works for some small
number of customers".
Then "we will be in a position to begin evaluating for
ultimate selection the various infrastructure manufacturers".
And contracts for infrastructure? "Some time in 2009 or maybe
early 2010", he says, with some 4G infrastructure in operation
"as early as 2010-11, but the timing of that isn't going to be
dependent on the infrastructure availability", he adds.
"When will these unique 4G consumer devices become available?
It's going to be the critical mass of those devices that will
determine when we are going to offer services in the Verizon
Throughout this period, there will be a close collaboration
with Vodafone. "From a technology standpoint, we have always
shared with each other and collaborated with each other."
The new project, including IMS as well as LTE, "has brought
our collaboration to a new level where not only are we sharing
information and comparing notes, but we are dividing work among
the companies", he says.
"Verizon Wireless is doing certain of the things and Vodafone
is doing others, and we're taking advantage of the capabilities
of both companies, so I would say that this is upped to a new
It's a "fallacy of the past" that Vodafone and Verizon didn't
get along, he says, a fallacy that "needs to be debunked. Steve
Pusey and I have a very strong relationship and we continue to
LTE will not be Verizon's universal mobile technology, though.
"Our announcement of LTE for 4G in no way shortens the life
span of 3G technologies," says Lynch. "I truly expect that in
2015 and 2016 and maybe even beyond many if not the majority of
our customers will still be on CDMA systems. I think that's a
point you ought not to lose."
But he's excited about 4G, and exciting about its convergence
with Verizon's fibre-to-the-home FiOS project — for
which he's now responsible as CTO of the group.
Convergence will have benefits for the operator in terms of
network simplicity, he says, "but the important convergence
that we as technologists sometimes miss is the convergence of
services for the customer".
FiOS is available in nine million US homes, and about a million
already subscribe. "It is a high-speed video connection, a very
high speed internet connection, and it's voice services
— and those voice services ride on VoIP."
Meanwhile Verizon will be running VoIP on its existing 3G
wireless network, opening up the possibility for "the
convergence of feature sets between your home phone and your
wireless phone", he says.
"Convergence is only defined narrowly by those who would not
have the vision of a larger ability. We believe that video
telephone is coming to the home and also to the [mobile]
handset. Next year? No, but convergence is an evolution and
it's going to get some time to get there," says Lynch.
"I don't believe we have even begun to enumerate all of the
opportunities yet. We in Verizon will begin to build many of
these features for the customers but we're not going to be the
This will create "a whole new business" of companies
programming applications that will then be offered through the
Verizon networks, fixed and mobile, to end users. If he's
right, it will open up a huge range of opportunities for
innovative companies. GTB