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Verizon's wireless network is straining under demand in big cities, exec says

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Verizon (STOCK)
Verizon (STOCK)

Verizon Wireless's chief financial officer Fran Shammo said today that customers are seeing lower data speeds due to "capacity constraints" in big cities, a rare admission for the carrier.

The rapid growth of data usage is outpacing infrastructure in cities such as New York, San Francisco, and Chicago, Shammo said at a conference today. This means many smartphone users are getting bumped off Verizon's LTE network down to its slower, older 3G network. The company claims LTE is up to 10 times faster than 3G.

Verizon has the largest LTE network in the US, having invested early compared to its competitors. It also claims to have the most reliable nationwide coverage, so it's a surprise to hear a top executive acknowledge the problems many customers have noticed on their own.

It's surprising to hear a top executive acknowledge the problems customers have noticed

Still, Shammo was optimistic, saying that "going into next year we will be ahead of the curve again." Verizon has also invested an additional $500 million in infrastructure, he says. Still, expect it to be a while before the carrier can stop falling back on 3G. The company has said it doesn't plan to start deprecating the increasingly-outdated network until 2015.