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Verizon Wireless is expected to enter the Alaskan mobile market sometime in 2013-2014, according to incumbent competitors, who expect Verizon’s largest impact will be to bleed AT&T of customers.
Alaska’s two primary local providers — Alaska Communications, Inc. (ACS) and General Communications, Inc. (GCI), are telling shareholders to relax because they don’t expect to see Big Red in the Alaskan market for at least 2-3 years. Both companies reported net losses for the quarter, and GCI lost 2,400 subscribers recently when more than 4,000 soldiers at Fort Wainwright in Fairbanks were deployed to Afghanistan.
Both ACS and GCI have been using the current poor economic climate and their respective stockpiles of cash-on-hand to retire debt or reissue long-term-debt at more favorable low interest rates. Both companies are also hurrying to outdo each other’s 4G wireless network deployments before Verizon Wireless shows up, making use of spectrum it acquired last August to enter the Alaskan market. Government rules require Verizon to sign-on its new network by June 13, 2013. But Verizon admits it will take up to five years after that to completely build a new network from scratch.
Right now, Verizon Wireless customers taking their phones to Alaska roam on ACS’ network, for which the company is compensated with an increasing amount of extra revenue. ACS boosted earnings in part on that roaming revenue, even as it lost more of its own customers. When Verizon switches on its own network, that roaming revenue will rapidly decline, but ACS executives reassured shareholders their knowledge and experience of construction seasons in Alaska guarantee Verizon won’t be able to get its network together until 2013 at the earliest.
But when Verizon opens their doors, Ron Duncan, CEO of GCI expects a hard fight on his hands.
“We recognize ultimately they’ll be a significant competitor, although I see AT&T share more at risk because Verizon’s main claim to fame when they get to Alaska is going to be devices. We’ll still outpace them on coverage. We’ll continue to be the only ones with statewide coverage,” Duncan said. “People who want to buy the coverage buy from us today; people who want devices buy from AT&T because AT&T gets much better devices than we do.”
Just months after Verizon announced they were headed north, both ACS and GCI accelerated plans to roll out respective “4G” networks for wireless customers, although each company is deploying different standards.
GCI
GCI’s cell phone network is a combination of some of its own infrastructure, the acquisition of Alaska Digitel, and a resale agreement to use parts of AT&T Wireless’ coverage it acquired from Dobson Communications Systems. In and around Fairbanks, Anchorage, Glennallen, Valdez, Prudhoe Bay, Wasilla, and Kenai, GCI offers CDMA service. In those communities and many other rural regions in western Alaska, GCI relies on AT&T Alascom GSM networks. GCI pitches its CDMA network’s 3G wireless data capabilities, which offer faster wireless data speeds, if you can get coverage. For wider coverage in Alaska’s smaller communities, GCI markets GSM phones, which currently only offer 2G EDGE/GPRS data speeds. If you use a cell phone mostly for voice calls, the wider coverage afforded by GCI’s GSM network is a popular choice. But if you want faster data, CDMA 3G data speeds are required.
Eventually, GCI’s 4G network may help deliver coverage and faster speeds in both urban and rural areas, particularly as GCI plans to invest up to $100 million to construct more of its own network, instead of relying on resale agreements and acquisitions.
GCI has chosen HSPA+ for 4G service on the GSM network, and will introduce the service in Anchorage later this month. That’s the same standard used by AT&T and T-Mobile in some areas. It’s not as fast as LTE service from Verizon Wireless, but is much cheaper to deploy because cell sites need not be linked with fiber optic cables — an expensive proposition.
ACS
Alaska Communications has a large 3G CDMA network in Alaska all its own. Its coverage is primarily in eastern Alaska adjacent to major cities like Anchorage, Juneau, and Fairbanks, and where it does provide 3G data coverage, the company claims it extends further out than GCI. ACS doesn’t offer much coverage in small villages and communities in western Alaska, however.
ACS expects to skip incremental upgrades and launch its own 4G LTE service in the future. It may help the company regain its second place standing, lost to GCI last year, and protect it from Verizon Wireless poaching its customers.
Other stories of interest:
- Me Too: Alaska Communications Systems First Among Regional Carriers to Match AT&T/Verizon Wireless Unlimited Pricing
- Adding Insult to Injury: Verizon Wireless Further Pummels AT&T in New Round of Holiday Ads
- Media Frenzy: The Second Coming… of the iPhone, Headed to Verizon Wireless With Unlimited Data
- Verizon Wireless Welcomes iPhone to Its Network Next Month; Stays Silent on Data Pricing
- Verizon Wireless Introducing Prepaid Mobile Broadband – 5GB for $80: ‘Way Overpriced,’ Critics Say
I am so disgusted with your site, you are so misleading. You know so little about what you are talking about it amazing. Anyone who has worked in the industry knows that you are only presenting the stories and bits to serve your agenda. Not once do i see where you have gone back and corrected things you got wrong, or updated things when companies changed policy.
Everyone of your posts about GCI is misleading and leaves out info. I am guessing it is true for all. Your like a politician. Why use lies, half truths , and smoke & mirrors to promote your message? Why not go to the government and to help these companies build the infastructure that we DONT have, so they can afford to bring you unlimited internet.
I mean you turn GCI Customers on to ACS who has slower speeds and smaller caps! They shut their customers down, it says it right in the small print, all the other providers in the area, EVERY ONE, has higher prices and smaller caps, at lower speeds, yet you attack GCI.
Do you have any clue what GCI has done for this state? There was not broadband, there was no choice, and still today they are bringing broadband to areas that AT&T, ACS, and all others would never consider.
You are an idiot, your site is misleading, and your fighting this fight the wrong way.
Ofcourse you wont post this..
I believe if Phillip does a lookup on Disgusted’s IP address they’ll find it’s a GCI employee.
As an resident of Alaska that has had GCI service over 15 yrs ago and recently with their elimination of unlimited plans, while also working locally for years in the industry I find your comments laughable.
Everything posted about GCI on this site has been accurate at the time it was made, GCI has changed service plans and pricing at times but nothing ever to benefit their customers.
ACS offers UNLIMITED internet service without the $100-600/mo+ overage fee’s for customers they go over their arbitrary metered plans. Who in their right mind wants to roll back the clock to the 90′s of metered dialup Compuserve or Cellular plan minutes with surprise bills of hundreds of dollars for something that costs pennies per gig.
ACS does not “shut customers down”. Just like any internet service provider they do have a terms of service, same as GCI. It’s not like they’re trying to sneak a fast one on anybody, having that clause in the ‘fine print’ is standard practice for every single ISP.
But hey, I’m sure GCI is more than happy to not shut down a customer that’s paying several hundreds of dollars in overage fee’s. They certainly didn’t for a number of co-workers that ended up with $200-600 bills due to their kids or roomates gaming or using hulu/netflix. It must be nice as a GCI employee to not be subject to overage fees.
As a past-GCI customer I’ll take UNLIMITED 3Mbit service ANY DAY over their overloaded cable system that often only delivered half the promised speeds during prime time, and when you do get your full speed that only uses up your allotted metered bandwidth 3x QUICKER. What good is 10Mbit service is you just end up with a $200+/mo overage bill at the end of the month because you actually used your high speed internet service that you were already paying a premium for to get that upgraded speed? Absolutely none.
GCI has abused their market position in this state to the detriment of Alaskan consumers, over the years they have increasing taken steps to reduce consumer choice and increase their profit by forcing bundles and increasing prices while padding that with per Gig metering at outrageous industry rates even for transit from Seattle.
GCI is no angel, they’ve only gone into communities where they’ve determined the same ROI that their competition ACS has done which often is only a 2yr payback leaving out many communities in Alaska from having service, or if they do get it it’s not affordable and even more heavily capped than that of Farbanks, Anchorage, and Juneau.
They’re also one of the biggest lobbyists in the states having paid for many favors and taken advantage of tens of millions in questionable grant projects that served to build out their network and FCC LifeLine funded cell phone service under the Digitel brand they acquired for some even more hefty profits.
What choice are you talking about? The choice of paying ACS $60-109/mo or paying GCI $150-190/mo (no I’m not even going to include their internet plans that only offer 3-5GB of usage, ie. less than a dollars worth of transit at best)
Oh and by the way, ACS is launching UNLIMITED plan upgrades soon which will offer between 5mbit to 10mbit service to existing customers. It’s already on trial with ACS employees and in one remote community.
If you’re going to try and defend GCI’s service in this state you’ll need to try a lot harder.
I agree with everything that Scott said. I am a life long Alaskan working in the Telecom field but for a utility company not GCI or ACS. I have tried both ACS and GCI services. GCI internet services work well during certain times of the day if you live near the cable head end, if you are the last customer connected you probably won’t get near the advertised rates. ACS may have lower data rates but it is dedicated back to their central office, unlimited download, and you know exactly what you are paying for monthly bills with no surprises.
ACS has just started test marketing their high speed internet with plans of 4Mbps, 7 Mbps, and 10 Mbps in East side and West side of town. One thing that annoys me is I keep getting advertisements and only some of my neighborhood has the copper facilities to support the new higher data rates and I live in a new neighborhood on the West side of town. You needt to be within 7500 feet of their central office. I wish ACS marketing team would talk with their outside plant engineers to know exactly where they can provide the new services and target the customers accordingly.
It is nice that another Telecom competitor is coming to town. Hopefully this will get the companies to offer more competitive products to their customers. I think that are broadband internet plans cost too much compared to the lower 48 and would like to see more competitive options. Alaska has one of the highest percentage of internet users because of being geographically isolated from the rest of the country but has some of the highest internet cost. I know that part of this is due to using satellites, microwave links, and fiber optic communications in remote areas but you would think with the federal subsidies and high % of the population using the internet that the costs would be $10-$30 less a month and still be profitable.
Disclosure: I own some shares of ACS stocks and have owned some GCI stocks in the past. Its nice to make a little money side when either stocks get really cheap and sell them for a profit later. This is very common among my coworkers in the Telecom industry.