Verizon Dumps Qualcomm for Euro Upgrades

The wireless giant has chosen so-called LTE as its next network technology, stiffing Qualcomm.
Author:
Publish date:

Verizon Wireless

has chosen a European technology as its path to fourth-generation wireless broadband expansion.

The No. 2 wireless telco says it has opted for the Long Term Evolution, or LTE, network standard and has selected big gearmakers

Alcatel-Lucent

(ALU)

,

Ericsson

(ERIC) - Get Report

,

Motorola

(MOT)

,

Nokia-Siemens

, and

Nortel

(NT)

as its initial suppliers.

The LTE technology standard is built on Europe's Global System for Mobile, or GSM, system and is being developed by the Third Generation Partnership Project group based in France.

The big losers in the choice of LTE are other 4G options like long-time Verizon partner

Qualcomm

(QCOM) - Get Report

with its OFMDA business and WiMax outfits including

Clearwire

(CLWR)

.

The move might not be a total blow to Qualcomm though. The San Diego tech giant has individual representatives on the 3GPP development body, and has said that it expects to have some royalty and licensing opportunities in LTE.

Verizon Wireless -- a joint venture between

Verizon

(VZ) - Get Report

and

Vodafone

(VOD) - Get Report

-- says it expects all the major phone makers including

Nokia

(NOK) - Get Report

,

Motorola

(MOT)

,

Samsung

and

LG

will have handsets that work on the new LTE technology.

Trials will start sometime next year, the company says.

The move would finally align Verizon and Vodafone on the same technology path. Currently, Verizon uses a CDMA-based standard in the U.S., but that system is incompatible with GSM networks operated by Vodafone in other markets.

"LTE will build on the capabilities of Vodafone's 3G broadband High Speed Packet Access (HSPA) network technology, which is available across the entire Vodafone 3G footprint," Vodafone said in a press release.

The company did not say how much it expected the LTE expansion plan to cost.

The move comes just two days after Verizon said it would open its network to other devices beyond what it supplies to its wireless service subscribers. Verizon requires that outside devices pass muster in its lab before receiving a stamp of approval.

Verizon says it is working with consumer electronics companies to embed wireless connections in future products.

Verizon shares were down 7 cents to $42.41 and Qualcomm fell 50 cents $40.92 in post-close trading Thursday.