In its 14th annual report to the United States Congress on wireless competition, the Federal Communications Commission said that far from diversifying, the sector is actually concentrating in fewer hands.
Covering a period including 2008 and into 2009, the report, issued today, found that this concentration had increased 32 percent since 2003 and 6.5 percent in 2008, indicating a significant decrease in competition. Less competition usually means fewer choices and higher prices for both individual and enterprise consumers.
The nature of wireless has also changed, encompassing a great deal more data, such as the “transition to a data-centric marketing” with activities such as text messaging and Web browsing, and a greater emphasis on wireless broadband. This report incorporated these changes.
“Over the past five years, concentration has increased in the provision of mobile wireless services. The two largest providers, AT&T, Inc. (AT&T) and Verizon Wireless, have 60 percent of both subscribers and revenue, and continue to gain share (accounting for 12.3 million net additions in 2008 and 14.1 million during 2009). The two next largest providers, T-Mobile USA (T-Mobile) and Sprint Nextel Corp. (Sprint Nextel), had a combined 1.7 million net loss in subscribers during 2008 and gained 827,000 subscribers during 2009.”
In a statement accompanying the report, FCC Commissioner Michael Copps agreed.
“(C)ompetition has been dramatically eroded and is seriously endangered by continuing consolidation and concentration in our wireless markets,” he wrote.
The report also found that capital investment in the wireless industry has declined relative to size.
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