Verizon 4G Device Has 3G Problem

NEW YORK (MainStreet) -- Here's yet another business wrinkle with fancy, schmancy 4G networking hardware: the hardware itself.

One of Verizon Wireless' ( VZ) popular 4G wireless devices, the Novatel ( NVTL) MiFi 4510L mobile hotspot ($49.99 with a two-year contract), has a glitch that can get some units stuck permanently in 3G mode if they enter an area without 4G, the company confirms. Verizon says it has sold millions of the devices, which turn Verizon's fast new 4G LTE network along with its 3G and 1G digital cellular services into a mobile access point to the Web for up to five users.

Verizon and Novatel say they are fixing the problem. Which is good, because as it stands they basically amount to a single-use 4G hotspot. One of my editors bought a Novatel MiFi -- based mostly on my recommendation, by the by. And then a replacement the next day. And then a replacement for the replacement the day after that. His brand-new 4G modems "died" not once, not twice, but three times. These units, bought in and around Boston, could connect to Verizon's cutting-edge LTE 4G signal at first. But if, for some reason, the device went into 3G mode -- say, by taking it into an uncovered area or going deep into a building -- it could never acquire a 4G connection again.

A running joke in the news business is that what happens to big editors is big news. But here in the gadget-o-sphere that's nonsense. When an editors has a tech problems, it's usually exactly that: an editor having a problem. So I was skeptical that this particular string of bad modems indicated Verizon had a larger problem with this product.

In fact, it did.

Bad network bug
Verizon confirms a connection problem similar to what we experienced. But it emphasizes that the company has sold many of the Novatel MiFi hotspots nationwide with few issues. (In fact, I have one in the test fleet in my shop and it has worked well for several months, including on a long drive around Boston this past weekend to confirm its working status.)

"There is an issue with some of the Novatel MiFi 4510L devices," Brenda B. Raney, executive director of corporate communications at Verizon, said via email. "But at this point, there have been a very few customer complaints. Novatel is aware and is working closely with our team to correct the problem and will do so in a maintenance update."

Novatel confirms that.

"Novatel Wireless and Verizon Wireless are aware of the issue," says Charlotte Rubin, senior director of public relations for Novatel, "and are working on a maintenance release/firmware update to be available in the near term for current subscribers."

Estimates on that fix range from September -- made by a technical support rep over the phone phone -- to anytime in the second half of the year, up through Dec. 31, according to two in-store reps citing an internal Verizon Wireless memo. A version of this email has been available since mid-July, a store manager says.

During a visit to a second Boston area store this past weekend, a salesman declined to give warnings about the 4G glitch at least twice, including when asked point blank about it: "Are there any issues with this device at all that I should know about?"

No simple fix
The bigger business problem of course is that none of the technological explanations or remediations Verizon Wireless offers are of much help to businesses looking to use their spiffy new 4G hotpots.

Novatel says getting back 4G access can be as simple as turning the device off and on again, but that did not work in our testing or for the support people in the Verizon store trying to fix these bricked devices. The next suggestion is to set the device to get only 4G, meaning that instead of finding a 3G signal when 4G isn't available, there will be no signal at all. That might make a user wonder at the point of having a mobile 4G device at all; it's a fast way to discover the LTE network isn't as pervasive as Verizon might want you to think.

Novatel went on to say it has seen the problem only in the home markets where the modem was bought. These home units fail when they are turned off in a 3G area and back on in a 4G area. But if that were true, wouldn't anybody flying in a plane -- or traveling a distance in a car -- trigger the bug?

Hardware's hand holding
So what do wonky hotspots mean long term for your firm? I am afraid it's not pretty: For a device like this -- that has been so deeply deployed for so long -- to go so utterly south indicates that 4G deployment is a much more complex technological endeavor than we all thought. It turns out, the network is often not stable enough. The hardware is often not stable enough. Which means, along with the usual headaches a business must face when deploying 4G -- Do my people have coverage? Can I get control software to work on my existing computers and smartphones? -- comes a new one:

When you buy a 4G device for your business, you had better factor in some downtime to not only make sure you have coverage and working communications software, but that the networking device itself works. A fatal bug may appear out of nowhere. And that's not good if you or your people are on the road and can't get to a Verizon Wireless store to get a replacement device ... and then another one. And then another one.

In the end, we swapped our Novatel MiFi unit for a similar Samsung modem, which appears to be working fine.

But who knows for how long?

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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