Verizon Wireless Launches Multimedia Service - InformationWeek

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Verizon Wireless Launches Multimedia Service

Verizon Wireless launches a multimedia service for its high-speed network that will deliver news, sports, music videos and 3D games to subscribers' handsets.

Verizon Wireless on Friday launched a multimedia service for its high-speed network that will deliver news, sports, music videos and 3D games to subscribers' handsets.

Billing the announcement as the "future of wireless," Verizon executives unveiled the company's VCAST offering at the Consumer Electronics Show in Las Vegas.

Starting Feb. 1, Verizon Wireless subscribers would pay an additional $15 a month for the service, which is expected to include more than 300 daily updated videos from several content providers. Accessing the service would require the purchase of a new phone supporting VCAST. Handset manufacturers include LG Mobile Phones, Samsung Telecommunications America and UTStarcom Personal Communications.

A premium service, available for an additional cost, would include 3D games, music videos and exclusive programming. Content providers include MTV Networks's VH1 and Comedy Central brands. Exclusive programs designed specifically for cellular phones have been produced through News Corp. and its 20th Century Fox division. Those programs include "24: Conspiracy," "Sunset Hotel" and "Love & Hate."

NBC also has signed on to provide programming, including newscasts made for the cellular phone.

VCAST runs on Verizon Wireless's 3G EV-DO network, which first launched commercially in October 2003 in San Diego and Washington, D.C. The service, which initially targeted business customers and mobile professionals, runs at average user speeds of 300 kilobits per second to 500 kilobits per second.

The network today covers 32 metropolitan areas across the country, or a population of 75 million people, Verizon Wireless said. By the end of the year, the company expects to expand coverage to 150 million people.

With its announcement Friday, Verizon Wireless executives made it clear the company was launching a major push into the consumer market.

"The promise of 3G (high-speed wireless) technology is finally in the consumer's hands," Denny Strigl, president and chief executive of Verizon Wireless, said at a news conference in Las Vegas.

The breadth of video programming has placed the company ahead of Sprint Corp., its closest competitor in the emerging consumer market for high-speed Internet services, Becky Diercks, analyst for market researcher Cahners In-Stat, said.

"Verizon may have one upped Sprint, because of the variety of programming, especially in the TV area," Diercks said.

Adam Zawel, analyst for the Yankee Group, agreed.

"They're one upping each other, but you can argue that Verizon is in the lead, right now," Zawel said.

The quality of the roughly two-minute video clips that VCAST subscribers would download was exceptionally good, Zawel said.

"The video is pretty compelling, even though it's on a small screen," he said. "It's the best video experience I've had on cellular phone."

Building high-speed networks have cost wireless carriers billions of dollars. Sprint, for example, has earmarked $3 billion to deploy an EV-DO data service. EV-DO, along with its competitor UMTS, are standards being deployed across Asia, Europe and the U.S. Both are based on CDMA technology developed by Qualcomm.

Zawel, however, believes the investment will eventually pay off. Yankee Group expects consumers to spend about $1 billion a year on ring tones, alone, by 2008, and an equal amount on games. They're expected to spend even more on information services.

Verizon Wireless, based in Bedminster, N.J., and a joint venture of Verizon Communications and Vodafone, plans to expand its VCAST service throughout the year with more multimedia offerings. The company believes subscribers riding busses or doing some other boring activity regularly will be willing to pay more for entertainment.

"People are always looking to kill time," John Stratton, chief marketing officer for Verizon Wireless, said at the CES news conference.

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