Verizon Shows Just How Competitive The Wireless Industry Really Is By Simply Refusing To Compete On Price

from the let's-play-make-believe dept

You'll recall that the CTIA recently argued that the wireless industry doesn't need to be governed by net neutrality rules (or any rules, really) because it's a sector that's just so gosh-darned competitive. And while it's true T-Mobile has been shaking things up of late (thanks in part to regulators blocking the AT&T acquisition), the market's big four players continue to make it clear that once you dig past a number of largely cosmetic promotions, the sector still isn't really all that competitive. That's especially true when it comes to seriously competing on price, something all four major carriers repeatedly make clear they intend to avoid at any cost.

Case in point is T-Mobile's latest effort to offer rollover data, or letting users store unused bits and bytes at the end of the month for future use. I already noted how AT&T's competitive response to this was to offer a rollover service of its own that's largely a joke; rolled over data allotments only having a shelf life of one month, and that data being unusable until you finish your normal data allotment. Yet that's better than Verizon Wireless, which responded to the growing trend toward rollover data by refusing to participate entirely:

"We're a leader, not a follower," (Verizon CFO Fran Shammo) said in an interview on Thursday..."We did not go to places where we did not financially want to go to save a customer," Shammo said. "And there's going to be certain customers who leave us for price, and we are just not going to compete with that because it doesn't make financial sense for us to do that."

Of course, when a market is truly competitive, you're not supposed to have a choice in the matter. While Verizon pretends it doesn't compete on price because it offers a "premium experience," the reality is Verizon doesn't compete on price because it has used regulatory capture to build a market that ensures it never has to. The result is a Verizon-AT&T duopoly that owns most of the nation's spectrum, dominates 80% of the retail market, and enjoys a stranglehold on the special access (fiber backhaul) market. As a result, Sprint's been barely hanging on for years, and T-Mobile's owner Deutsche Telekom isn't sure T-Mobile can survive long-term. What the media calls a "price war" is more like a "light price scuffle."

It's something worth remembering the next time someone (usually a wireless industry lobbyist) tries to tell you the wireless industry is ultra-competitive (or doesn't need net neutrality protections) simply because there are four companies in play. What we usually see, with the occasional exception, is a pantomime of real competition. In this case, Verizon can't even be bothered to go that far.

Filed Under: competition, rollover, wireless
Companies: verizon