Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) are the biggest companies in the so-called competitive wireless telecommunications market. These two companies, while supposedly rivals, make up 70 percent of the smartphone market in terms of subscriber numbers. However, one writer has noticed the seeming chumminess between these so-called competitors – while they’re supposed to be battling for market share, it seems as if they’re just trying to control the wireless industry, by seeming to work together in establishing pricing models.
This piece looks into the suspicious uncreativity of the two behemoths, Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T), in that when one company sets a pricing model or price plan, the other company – to supposedly “compete” – actually copies the same model. It is as if the two companies don’t want to wage war on each other, but just do enough to keep their subscribers loyal and prevent the small companies – most notably, No. 3 carrier Sprint Nextel Corporation (NYSE:S) from grabbing any more market share.
However, there is a wonder if this copycat move will really work. And the writer wonders if this look and feel of collusion can avoid legal scruitny much longer. The number of new subscribers to wireless contracts with any of the wireless carriers has been trending downward – meaning that there are a lot of people who are already locked into a contract somewhere so that there aren’t too many new customers. Now it’s a matter of trying to keep customers from jumping ship to other companies. And it seems to the writer that neither Verizon Communications Inc. (NYSE:VZ) nor AT&T Inc. (NYSE:T) seem particularly interested in fighting for each other’s customers – almost as if they’re working together to keep each other’s customers from jumping to one of the “other” wireless companies.
And the concept of collusion is supposed to be a no-no by federal regulators. The writer can only theorize that the reason the Federal Communications Commission is not looking into the similarities in the pricing models of Verizon Communications Inc (NYSE:VZ) and AT&T Inc. (NYSEVZ) and the coincidental timing of their pricing changes, could be that there is no other viable competition in the industry. If Sprint Nextel Corporation (NYSE:S) can break through and grab more market share in the next 12 months to cut into that 70 percent market share and can make a case as a legitimate competitor in the industry, would it then make regulators at least look at the discouragement of competition. But until then, it seems that Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) will be dance partners for the foreseeable future.
