Verizon, AT&T Strive to Stay on Top
Verizon and AT&T are expected to continue fervent jockeying for subscribers, faster networks, and top devices in this year as competition in the mobile market grows increasingly fierce.
Verizon and AT&T hold the top two positions among U.S. wireless carriers, but the companies won’t spend the year ahead resting on their laurels.
Verizon boasts the largest, fastest network with the most 4G LTE coverage, but the company needs to find ways to cultivate subscriber interest and loyalty to stay leader of the pack.
AT&T is looking to climb out of the ruins of its failed T-Mobile acquisition, complete fresh deals, and move out of the customer satisfaction basement — as well as get out from under Verizon’s shadow once and for all.
These two companies got their start in old-fashioned telecom, and were the giants of the field. Now, it’s all about data, devices and mobility. Can these titans keep momentum going in a rapidly shifting field?
Verizon Seeks Spectrum to Satisfy 4G Growth
Like its rivals, Verizon continues to search for wireless spectrum to satisfy the proliferation of data-hungry devices.
The Basking Ridge, N.J.-based carrier recently acquired bandwidth from cable companies Comcast and Time Warner to reduce spectrum strain. The venture also included a cross-resale agreement with Comcast, and Verizon is expected to begin selling Comcast’s cable services in its stores later this year.
The Justice Department is investigating the deal, however, on grounds it jeopardizes the competitive relationship between Verizon’s FiOS television service and cable companies. If regulatory pressure mounts, Verizon is likely to be left looking for deals that steer clear of antitrust laws.
Verizon’s need for spectrum underscores rapid growth of its 4G LTE network, which is expected to continue expanding this year. The fast network is growing ahead of schedule, giving Verizon a distinct competitive edge, but recent 4G outages raise speculation the carrier is building out too quickly, creating a possible opportunity for rival carriers to gain ground as the year progresses.
Seeking Entry into Mobile Payment Field
The budding mobile payment industry represents another opportunity for the carrier to diversify and grow. Verizon has teamed up with AT&T, T-Mobile and several credit card companies on an NFC-enabled mobile payment system called Isis, expected to launch later this year.
Verizon’s desire for Isis’ success may have led to the carrier’s decision to block Google’s mobile payment app, Google Wallet, on the Samsung Galaxy Nexus. Customers waiting for a mobile payment option on Verizon devices may find themselves holding out for the Isis launch if the company continues this strategy, which may eke out a place for Verizon in what’s expected to be a highly lucrative field.
New Plans, Faster Devices
Verizon is also expected to roll out new plans and devices this year. The carrier will likelyoffer shared plans providing a bucket of data subscribers can then divide among several connected devices, an attractive option for consumers tired of making monthly predictions about how much data each member of their household will use on each device they own.
The company cleaned out its catalog of devices at the start of the new year, discontinuing the Motorola Droid 3 and several other phones. These changes make way for new Android smartphones the company expects to introduce at next week’s CES trade show and follow the carrier’s expected strategy of pushing forward high-end Android devices this year.
However, the company’s quick cancellation of devices it began offering less than a year ago may also turn off some customers, and lead many to wonder what Verizon’s update cycle will look like in the year ahead.
AT&T Searching for Deals in Wake of Merger Failure
AT&T’s quashed merger plans with T-Mobile leave the carrier slightly at sea in this year’s shifting market.
The Dallas, Texas-based carrier spent the bulk of last year trying to push its acquisition of T-Mobile and its spectrum through federal regulators. In the meantime, its competitors, especially Verizon, were busy making spectrum acquisition deals, leaving AT&T scrambling for options as 2012 dawns.
AT&T purchased spectrum from Qualcomm in a $1.9 billion deal recently approved by the FCC. The spectrum acquisition may not entirely make up for the merger collapse, but it is expected to give the carrier some momentum heading into 2012 and provide some of the bandwidth it needs to build out its 4G LTE network as it attempts to catch up with Verizon.
One deal likely won’t gain AT&T all the spectrum it needs, though, and the carrier may well enter into other deals this year, including a rumored acquisition of satellite television provider Dish Network.
Moving Beyond the IPhone
AT&T was the first U.S. carrier to offer Apple’s iPhone, and remained the sole provider of the hot-selling device for some time, possibly leading some subscribers to stick with the carrier despite high levels of customer dissatisfaction.
This is the first full year all three top carriers will offer the iPhone, leaving AT&T looking for new ways to diversify its product line and distinguish itself in the eyes of subscribers.
Beside beefing up its Android lineup, the company is likely counting on upcoming new Windows phones from Nokia to give it a push in the highly competitive market. Release of the Nokia “Ace,” expected in March, will mark the first time a major cell phone carrier is getting behind the Windows name.
The Ace could potentially be one of the first new devices to support AT&T’s new, faster 4G LTE speeds, and the carrier is expected to invest heavily in its promotion and success. It’s a risky strategy, given that Apple’s iOS and Google’s Android make up nearly three-quarters of the smartphone market in the U.S.
However, banking on Microsoft’s brand name and ability to penetrate the market just may work out for AT&T if the Windows phones take off and win over customers.
The next year will likely be a year of many risks for both top two carriers, as one looks to stay leader of the competitive pack and the other tries to climb out of the ashes and find new opportunities.
