Verizon and AT&T said they are cooperating with a federal investigation into potential collusion over wireless device standards but downplayed the controversy and their involvement in it.
The global industry group developing the standards, meanwhile, said the issue is on hold until the investigation is completed.
A report last week indicated that the Justice Department was looking into whether Verizon, AT&T and other major U.S. carriers colluded with GSMA to allow carriers to lock devices to a specific network — even if those devices were equipped with eSIM technology that would allow for easier switching between providers.
Verizon told The New York Times in a statement that it was working with the agency for several months but characterized it as “a difference of opinion with a couple of phone equipment manufacturers” and “much ado about nothing.”
AT&T added that it was aware of the probe and had provided information to DOJ investigators in an effort “to move this issue forward.”
eSIM technology would eliminate the need for SIM cards in smartphones, as well as the need for customers to buy new SIM cards when they switch carriers. Although carriers could be worried about the ramifications of customers switching more easily, tech companies would like to see the space in phones and other devices ordinarily reserved for SIM cards to be used for other systems.
Bloomberg reported that Apple, whose latest smartwatch uses eSIM, was among the device makers that complained to the government about alleged collusion.
In addition to placing the latest eSIM specification process on hold, GSMA indicated it was “cooperating fully” with the DOJ probe. The group said although the standard could enable the eSIM to be locked, consumers in the U.S. would need to consent to that option under their agreements with carriers.
J.P. Morgan analyst Philip Cusick, according to MarketWatch, wrote in a note that previous investigations of wireless providers did not significantly affect the industry and that he “would be surprised to see a painful outcome for carriers in this one.”
But Cusick did suggest that the probe could affect Sprint and T-Mobile should those carriers finally reach a merger agreement.
“While we see the wireless industry as highly competitive, a DOJ view that carriers are colluding could mean that a potential Sprint-T-Mobile merger would face higher scrutiny, making us somewhat less optimistic about that deal,” Cusick wrote.
Filed Under: Industry regulations