As more users turn to 4G LTE networks for browsing and streaming videos, Verizon is unable to cope with the network traffic.
Verizon CFO Fran Shammo recently admitted that the company was facing network traffic pressure in bigger cities like New York, San Francisco, and Chicago. He also said that the company is on its way to fixing the issue and it should be resolved by the end of this year.
Chances are the some of the 4G LTE customers might get downgraded to even 3G services on the network. Needless to say, the speed and performance drop from LTE to 3G is remarkable.
"There are certain pockets where we're absolutely going to experience that down tick from the LTE network down to 3G because of capacity constraints," Shammo said at an investor conference on Tuesday. The "pockets" mentioned by Shammo might be those bigger cities where the 4G LTE demand is massive.
By far, Verizon has been able to maintain its stature as the most reliable network in the country. Previously, we saw it advocating about paying a premium for its high speed wireless services and preferring it over other service providers like AT&T.
Verizon is the largest as well as longest running LTE network in the country. The company has the largest number of LTE customers too. One third of the total Verizon subscribers are LTE customers who also consume 64 percent of the data traffic. Most of these data traffic came mainly from video streaming.
For corrective measures, the company has already considered increasing its capital expenditure by $500 million this year. Apart from this, Verizon is also investing in the small cell technology.
"By the end of this year you are going to see all those issues dissipate," Shammo added. "And then going into next year we will be ahead of the curve again."
