Verizon Wireless said Wednesday that it would turn on its 4G wireless network Sunday in 38 U.S. cities, though the new network will not support smart phones until the first half of 2011.
Instead, the 4G network — which the company says is up to 10 times faster than the current 3G network — will initially be accessible only with USB modems from LG Electronics Inc. and Pantech Corp. The devices, which users can plug into their laptops to tap into 4G speeds on the go, will cost $99 after a $50 rebate and a two-year data contract.
Those contracts will be priced at $50 per month for 5 gigabytes of data, or $80 per month for 10 gigabytes. Verizon executives said the two plans would accommodate nearly everyone's data usage.
"It's a quantum, generational step up from what our customers experience today," said Verizon's vice president and chief technical officer, Tony Malone, in describing the company's 4G technology, which is called LTE, or Long Term Evolution. "We're the first to offer LTE at the scale that will really make a difference and kick-start the ecosystem and environment of 4G."
The network will be switched on in major markets such as Los Angeles, the San Francisco Bay Area, Chicago, Washington and Boston. Because the network is still being built, it will only reach about one-third of the U.S., and the company urged potential buyers to check its website Sunday to see whether their home or office will get a 4G signal.
On Monday, Sprint Nextel Corp. and partner Clearwire Corp. announced they had added 4G service in several major cities, including Los Angeles, Miami and Washington, bringing the total number of cities in their 4G network to 68.
Verizon's Malone did not offer any details about upcoming 4G-capable smart phones, nor did he comment specifically on whether Verizon would add a version of Apple's popular iPhone.
Dan Hays of management consulting firm PRTM called Verizon's announcement a "watershed moment in the wireless industry" and said he expected the higher-speed networks to stimulate a number of other business areas.
That could include putting more pressure on the providers of home broadband service to cut prices. If consumers can get approximately the same speeds over the cellular networks as they can through DSL and cable modems, he suggested, then why pay for both?