Analysts have said that AT&T has lost more customers than other companies since new legislation allowed number portability-the right to change service providers without having to switch phone numbers. Will the merger stave the flight? Cingular’s purchase leaves just four other major wireless carrier options for customers in the United States: Verizon, Sprint PCS, T-Mobile and Nextel. Can wireless consumers expect more mergers in the industry? Customers already moan about bad coverage and poor customer service. Will consolidation lead to greater efficiency or just higher prices?
Joseph Bradshaw makes a living pondering such questions. As founder and editor of WirelessAdvisor.com, he helps consumers parse cell-speak to figure out how to get what they want from their provider. Bradshaw spoke with NEWSWEEK’s Brian Braiker, by landline, after the merger was announced about what consumers might expect.
NEWSWEEK: Cingular just acquired AT&T. Will there be more mergers in the wireless industry?
Joseph Bradshaw: Jeez, that’s tough to say. The funny thing is that everybody has been talking about this consolidation as much as maybe three years ago. Finally something happens with AT&T and Cingular. Who’s next? That’s tough, really impossible, to say.
If this deal closes, the combined company would unseat Verizon as having the most U.S. subscribers. What does that mean for Verizon and its clients?
Verizon really has been tremendously successful, almost to the point where they have a monopoly on quality. They have the most subscribers; they won all the awards from the Consumer Reports and JD Power [and Associates]. What it means is that now there is another company of similar size that can approach their network quality and their network coverage. So for them, it means competition. Maybe it will affect rates. For AT&T and Cingular, it means they have a chance at success now.
Both Cingular and AT&T Wireless have each had their own management, customer service and technology problems. Could this merger make their problems worse?
Probably in the short term they may have some trouble getting together. The good thing is that they’re both using the same technology now, the GSM [Global Standard for Mobile]. Whereas in the past they had both used TDMA [Time Division Multiple Access] and made the decision to transition to GSM. So now that there’s a combined GSM network, it’ll be a different technology to compete with the overall coverage of Verizon, which uses CDMA [Code Division Multiple Access]. In terms of getting together, there may be some issues. From what I’ve heard, the AT&T brand name is going to go away and they’re going to call themselves Cingular. Probably that’ll mean some of AT&T’s infrastructure will be discarded in terms of customer service. Definitely on the consumer side there will be some trouble with the transition. But overall I think it’s a good thing. It’ll be a larger, more comprehensive network.
Could the GSM, CDMA technology split hamper further consolidation? Are we going to see one go the way of the Betamax?
I don’t think we’ll see that in the U.S. The [rest of the] world uses GSM. CDMA is pretty much just used in the U.S. and a few other places … So that’s one advantage that this AT&T/Cingular combination will have over Verizon.
So people who have a GSM cell phone can use it when they go abroad?
Right. You’ll be able to take your phones, whereas if you look on the Verizon site for international use, they offer to rent you a phone in other countries. With not all GSM phones but most, and probably more in the future, you can just bring them over to the country, turn it on and use it.
Some pundits have predicted mergers will lead to streamlining of services and greater efficiency. Others have predicted less competition and heftier phone bills. Which do you see happening in the short and long term?
I think the situation we have now, where Verizon dominates the quality, they can charge a bit more. All of the carriers continuously work to improve their systems and their coverage. So I think they’re all going to converge on having very good quality. So the end result will be more competition in terms of price, down the road. So longer term I think we’ll go right back to declining prices.
I was reading the portability forum on your Web page and it seems like there are some horror stories out there: long waits, mismatched names. Who’s the best on portability?
Again, it’s been Verizon. They seem to have their systems in order and a good process. In fact, the May 24 deadline for the rural carriers is coming up and Verizon wants to put together a program where they teach some of these small carriers how to do it. Actually, that will benefit Verizon since Verizon is the carrier that is receiving most of the incoming numbers. So if they these other companies do it, it just makes it easier for them to get more customers.
One poster wrote “I’d rather take my chances volunteering in an Ebola ward than try and port with AT&T.”
[Laughs] Yeah, that’s funny. AT&T had some software problems initially. It seems that things have gotten better, but with some of these stories you read, it’s hard to know what the real problem is, because when somebody wants to port their number from one carrier to another, they have to have all their information in order. Sometimes you don’t know the story behind the story with some of these people who tried to switch. It may be just an individual problem that’s causing the trouble, so it’s hard to say.
So portability may be coming soon to smaller cities?
Right. Initially, with the recently passed Nov. 24 deadline, it was basically the top 100 metropolitan areas. Coming up will be the May 24 deadline, which is basically the rest of the country.
How do you think that’s going to go?
[Laughs] I don’t think it’s going to go as smoothly as even this previous deadline did, because there are many, many very small wireless companies out there. Most people think about the top six plus maybe a handful of other regional companies. But really there’s more than 100 of these licensed cellular and PCS [Personal Communication Services] carriers out there. Some of them are very small and they’re not going to have their systems in order like the big guys did. So I think we’re going to hear some more stories.
What’s your take on cell phone cameras? They really eat up your batteries and there seems to be a limit to what they can do.
I think it’s a great application. It’s really got people jazzed up about the hardware of the cell phones again. Like any other technology, it’s going to get better in a blink of an eye. But you’re right, the issue is batteries these days. And that’s the lagging technology.
Any advice for consumers in the market?
One thing we tell most people is that it’s not like you’re buying a washing machine when you’re buying a cell phone. What you’re buying really is the service, so you need to find the company that serves your particular area the best. The best way to do that is to ask your friends and your co-workers and the people who drive the same routes as you. Find out which company serves them the best. A lot of times that’s going to be Verizon, but depending on your area there may be some other good carriers. Then, only then, do you start looking for plans and the nifty phone. That’s what our discussion forums are for. Say you’re going to move to a new area-say Denver or something-you could just pop right on there and ask some opinions and get some good information. But there really isn’t any reason to deal with all the junk and the unknown companies out there.
Do you see these little companies fading away over the years?
Well, it’s easy to buy from the wireless carriers over the Web, so it just seems we’re in a period that there’s a lot of junk out there. I think that’s like any other product and it’s hard to say where it’s going to go.
