Verizon Wireless and Friends Taking on Google?
Verizon Wireless, Telecom giants AT&T, and T-Mobile have committed to invest over $100 million in a joint venture that will allow consumers to make purchases using their mobile phones.
Experts said the move by Verizon Wireless and others shows how desperate the three are in countering other services offered by giant rivals such as Google Inc.
The funding, called “Isis”, is yet to be disclosed to the public, but will depend on the feedback from merchants and financial institutions according to news reports.
The announcement comes on the heels of AT&T Inc.’s $39-billion plan to acquire T-Mobile USA Inc., a move sought to be thwarted by the Justice Department on grounds that combining the two wireless giants could hamper competition and innovation.
The federal agency has filed an antitrust lawsuit to bar AT&T from acquiring T-Mobile USA, which it said will displace Verizon Wireless as the nation’s largest carrier and will lead to less competition, higher prices and fewer options for consumers.
AT&T has the second most subscribers in the country, T-Mobile being the fourth largest.
Verizon Wireless employs more than 195,000, and has generated $107 billion overall revenues in 2009 for its operations in providing communications services to various sectors in the community, including government, corporations, mass markets, and wholesale clients, and in delivering business solutions to its global customers.
Cellco Partnerships, a subsidiary of Verizon Communications Inc., won on December last year an exemption from complying with the filing guidelines of the US Securities and Exchange Commission, giving the company to enjoy lesser costs, increased efficiencies, and opportunities to streamline its reporting.
According to Deputy Atty. Gen. James Cole, AT&T plan would hit consumers in rural areas or with lower incomes the hardest.
AT&T said it would “vigorously contest this matter in court”. The company plans to request a hearing to review the “enormous benefits” of the acquisition.
Wayne Watts, the company’s senior executive vice president, said the deal “is in the best interest of consumers” and would improve wireless service for millions.
With more than 300 million phones, tablets and other mobile wireless devices in service across the country, AT&T, T-Mobile, Sprint and Verizon Wireless dominate more than 90 percent of the market, according to government records.