Verizon Wireless is looking to launch Voice Over LTE by the end of 2013 or beginning of 2014. With Voice Over LTE this will allow for Verizon to route all voice calls and text messages over the company’s 4G / LTE network. Right now voice calls and text messages are currently going through the company’s 3G CDMA network.
During the Deutsche Bank 2013 Media, Internet & Telecom Conference, Verizon CFO Fran Shammo stated, “As Verizon moves to Voice Over LTE technology late this year and early next year, the company will begin to launch devices without CDMA chipsets in them, which also should reduce subsidy cost.”
Verizon believes that subsidies for smartphones and other devices will fall over the next couple or few years as competition increases between the different operating systems and devices that will be made to only run on LTE.
Shammo also said, “That subsidy cost are a big part of Verizon’s expenses, but only one part, and he said that the subsidy model has prevailed in the U.S. market for the last 12 years.”
Carriers are looking at eliminating subsidies to increase their bottom line. T-Mobile has already done this by selling a device for $99 then charging you $20 a month on your bill for 20 months to pay it off. One of the reason plans on MetroPCS and Virgin Mobile are so inexpensive is because they are not trying to recover the device subsidy.