Coverage and then there is coverage
The POP or population covered and market race is on again
for 4G/LTE coverage. Carriers had been battling in this numbers race back when
3G was introduced. Population covered
had been the norm in showing coverage. However, that is just one component of
market positioning. The other one is
geography. From the national map view,
Verizon Wireless is pretty much in the driver’s seat with the 2008 Alltel acquisition.
To Verizon Wireless’ credit, the carrier
has been effectively exploiting its geographic advantage and is central to the “Why
Verizon Wireless?” marketing strategy.
Why haven't AT&T and other tier one
carriers T-Mobile and Sprint matching geography coverage? Simplistically,
these carriers are more or less taking a population density approach. They are covering where most people are using their phones. As one carrier analyst
relations professional explained in the past, “We’re not going to build a
network to cover cows.” There is financial logic to that as capital
expenditures are scrutinized by investors.
What’s the return on investment on covering cows? Does a company really have enough capital to
match Verizon Wireless’ geographic coverage? The short answer is yes but some
are in better financial shape than others.
In the 3G realm, forging roaming agreements
becomes the equalizer. For
example, Sprint got the map coverage to largely with an agreement with
Alltel (pre-Verizon Wireless takeover).
Leap in another example uses Sprint as its main roaming partner.
Therefore, the operational cost of roaming
outweighs the capital cost in building a network in specific markets. Besides, the ability to provide coverage and
connection to customers is extremely important in light of the expectation of US
national coverage. This is all fine for 3G networks but as the industry moves to LTE, a different marketing dynamic takes hold which fuels this vicious coverage arms race again.
The next post the complexities and confusion that 4G and LTE
bring…
