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Verizon Will Expand Wireless Web Service

Posted on: Friday, 9 January 2004, 06:00 CST

Jan. 9--The race to provide fast wireless Internet service speeded up yesterday.

Verizon Wireless, the country's No. 1 cell phone company, said it would spend $1 billion over the next two years to offer a high-speed mobile Internet service nationwide.

The BroadbandAccess service, which has been available in San Diego and the Washington, D.C., area since October, is based on Qualcomm's patented technology and offers speeds five to 10 times faster than wired dial-up service.

Michael King, a wireless industry analyst for Gartner Group, a market research firm, said he was surprised by how quickly Verizon decided to expand its BroadbandAccess service.

"It's a big move, a real big move," King said.

Verizon has not disclosed how many subscribers have signed up for BroadbandAccess in San Diego and Washington, but King said it must have exceeded expectations because the company is rushing to expand the service to much of its network by summer. The service costs about $80 a month, with the wireless modem selling for $150 after a $100 rebate.

Verizon's announcement is a boon for San Diego's Qualcomm, which makes its money by selling phone chips and by charging a royalty any time its patents are used.

Investors reacted well to the announcement, driving up shares in Qualcomm by almost 6 percent, or $3.19, to $58.95, their highest price in almost two years.

Not only is Verizon's rollout plan good for Qualcomm financially, it also is an important boost for the company's technology, said Jeffrey Belk, Qualcomm's senior vice president of marketing.

"From that perspective, it's a validation," he said.

Verizon's spending spree is also good news for telecommunication equipment companies such as Nortel Networks and Lucent Technologies, which have struggled in the past few years as telecom companies have cut back on budgets.

But Verizon's plans for a nationwide launch also may put pressure on other wireless companies such as AT&T, Sprint PCS and Cingular to upgrade their networks to provide faster data speeds.

"What this basically does is up the stakes for everybody," King said.

In November, AT&T Wireless launched its new, faster wireless Internet service nationwide. AT&T, however, uses a different technology, which only offers speeds that are about twice as fast as dial-up service. AT&T plans to test another, faster technology in four markets at the end of this year.

Ritch Blasi, an AT&T spokesman, said his company's network "today, and for the foreseeable future, provides the fastest national wireless data connections in the country."

Sprint PCS, which uses the same wireless standard as Verizon, said it won't follow in Verizon's footsteps, instead using a different version of the technology.

King said the companies without a real plan to offer next-generation services, such as T-Mobile and Cingular Wireless, could be in trouble if wireless Internet services begin to really take hold. Whether there is a mad dash for newfangled data services such as mobile video and music, however, is still a big if.

"Let's take a step back and realize that most users still don't use it for data. It's primarily for voice," he said. "Migration to data is going to take a while."

Belk said he is convinced that the much-hyped wireless Internet is finally hitting its stride.

"Wireless data is no longer an if," Belk said.

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To see more of The San Diego Union-Tribune, or to subscribe to the newspaper, go to http://www.uniontrib.com

(c) 2004, The San Diego Union-Tribune. Distributed by Knight Ridder/Tribune Business News.

VZ, VOD, QCOM, IT, T, PCS, BLS, SBC, DT,

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