telecommunications

Verizon seen benefiting more than AT&T from iPad

BLOOMBERG NEWS PHOTO/TONY AVELAR
ATTENDEES OF the launch event for Apple's new version of the iPad tablet computer held March 7 in San Francisco. The new product is expected to greatly increase data usage and give Verizon Wireless a boost over AT&T.
Posted 3/9/12

NEW YORK - Verizon Wireless is poised to get a bigger boost from Apple Inc.’s new iPad than competing wireless-service provider AT&T Inc., even though both carriers will be the first in the U.S. to sell the tablet, unveiled Wednesday.

Verizon Wireless will probably sell 3 million to 4 million new iPads this year, while AT&T will sell about 2 million units, said Kevin Smithen, an analyst at Macquarie Securities USA Inc. The iPad is designed to work on the companies’ next-generation wireless networks, based on a technology called long-term evolution, or LTE.

AT&T’s LTE network isn’t as extensive, covering fewer potential customers. Verizon Wireless also lets subscribers turn their iPad into a mobile hot spot, a capability not yet possible with AT&T. As a result, Verizon Wireless customers may be able to make more use of their Apple tablets, Smithen said.

“Verizon is going to benefit more,” he said. “The iPad could mean pretty significant growth for Verizon, because they have good LTE coverage.”

The Verizon Wireless LTE network covered more than 200 million potential customers at the end of last year, the company said in January. AT&T, based in Dallas, said that month that it reached 74 million would-be users with LTE.

“Competitively, Verizon Wireless’s more extensive LTE footprint gives it a modest marketing advantage,” James Ratcliffe, an analyst at Barclays Capital, wrote in a report Thursday.

Even when AT&T customers are outside an area covered by LTE, they “are still going to have a very fast experience,” said Mark Siegel, a spokesman for AT&T.

More data purchasing

Many owners of the iPad 2 use the tablet on free Wi-Fi networks at homes, offices and cafes to avoid costly wireless data charges. That’s likely to change as subscribers seek to take advantage of the fuller range of iPad capabilities. As many as 30 percent of purchasers of the new device will use it on carriers’ networks, up from less than 20 percent for prior- generation iPads, Smithen said.

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