Can the iPhone bring down Verizon the way it did AT&T?

Upgrade to LTE, adding iPhones at the same time? Great idea!

Verizon Wireless got a huge bump in mindshare by announcing it would sell an iPhone for its market-leading but-still-overhyped cell network, especially from AT&T users who can't wait to jump on a comparatively reliable network advertised to run between 5Mbit/sec and 12Mbit/sec, and often does.

That's Verizon's LTE network, which only went live last month and is only available in 38 markets.

That will expand rapidly throughout the year to as many as 140 markets, but not painlessly, according to both common sense and research from mobile-analysis firm In-Stat.

Building out the LTE network will be fantastically expensive for Verizon, which is already complaining to the FCC that it can barely keep up the payments on its current network and needs to remain free to squeeze more investment from its customers.

The speed and low latency of LTE is so attractive In-Stat predicts more than half of all last-mile connections -- the final links between the home or end-user and a wired Internet backbone provider -- will be LTE by the end of 2014.

That kind of market opportunity has Sprint, AT&T and all the other little cell carriers out there mildly interested in offering LTE as well, however, so Verizon can't follow its usual strategy of rolling out new technology slowly and cheaply.

Its introductory $50 per month baseline data price undercuts its 3G prices, in fact, mainly to build up momentum against the HSPA+ network T-Mobile is deploying in 80 markets and the WiMax nets Clearwire is laying out in 68 markets, according to Michele Pelino at Forrester.

That lays the groundwork for the kind of debacle AT&T faced not when it put iPhones on its network without being ready for either the number of subscribers or amount of data each used.

The performance problems were severe, complaints were frequent, and AT&T's reputation hasn't recovered yet. (Its service hasn't either, though it has improved quite a lot since then.)

Verizon has managed to avoid that crunch so far, but then it hasn't had to deal with the twin curses (to a network manager) of an upgrade to much bigger pipes and an influx of new users on new devices that may suck away every available bit of bandwidth as fast as it's put on the air.

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