U.S. Carriers: 3G Has Caught Up Here

ATLANTA — Top executives of six major wireless service providers said the industry is a lot healthier than people think, but suggested they could do more if federal lawmakers eased some of the regulations in the 1996 Telecommunications Act regarding competition.

But beyond agreeing that U.S. carriers are catching up to other global markets with recent 3G data service rollouts, the executives agreed on little else — and kept their keynote appearance at the CTIA Wireless 2004 show here lively with a few healthy jabs at their fellow competitors.

The CEO roundtable discussion included the impact of the 1996 Telecommunications Act on incumbent phone companies, local number portability issues, 3G investments and the impact of Cingular’s winning $41 billion bid to acquire AT&T Wireless , to name a few topics.

“I don’t think consolidation [from the acquisition] has any impact on the industry at all,” said Denny Strigl, the president and CEO of Verizon Wireless. Strigl said there are still plenty of carriers competing with each other, even after six carriers narrow to five. In addition, the wireless providers are facing two or three local competitors in regional markets. “Choice remains huge for the consumer,” he said.

“As a result of the [AT&T Wireless/Cingular merger] the company will have a better network product,” said Tim Donahue, president and CEO of Nextel Communications . Donahue got the friendly jabs going when he quipped that the company “can’t wait” to buy Verizon Wireless.

“Wireless is such a part of the fabric now that if you don’t have a great network, you won’t have a good business,” said John Stanton, chairman of T-Mobile USA.

“That will cut down on the churn in the industry,” added Stan Sigman, president and CEO of Cingular Wireless.

Len Lauer, president and COO of Sprint PCS , said it was unrealistic to expect any federal rewrite of the landmark 1996 Telecommunication Act, especially federal regulations over how incumbent telephone companies have to help rivals compete with them.

Most of the executives agreed that the local number portability ruling that went into effect this year has been a relatively smooth transition, save for a few glitches.

When asked if different networking protocols among 3G providers would slow the industry, such as the GSM-flavored EDGE data networking standard compared to the competing EVDO protocol that is part of the competing WCDMA protocol that dominates the U.S. market, the providers said users don’t really care — as long as it works.

“We’re on an inexorable path to faster data speeds and more reliability,” said John Stanton, chairman of T-Mobile USA. “The way I look at it, the different platforms are in a race in which one gets ahead [for a while], and then the other gets ahead.” The key issue for the industry, he added, is not to become myopic over time as new technologies evolve — otherwise, new competition will move in to challenge providers’ markets quickly.

Strigl said Verizon’s rollout of its EVDO network to national markets, which it announced at the CTIA Wireless 2004 show this week, is “an evolution of what customers want: high speed.” The data service, which promises data speeds of between 300-500 kilobits, with bursts of up to 2 MB per second, is now being rolled out nationally. “I am finally convinced that as we build it they will come. And they have come,” Strigl said.

Stan Sigman, CEO of Cingular, conceded that U.S. carriers had been behind wireless data providers in European and Asian markets. “But now the marketplace is ready [in the U.S.] and the timing is right. We’re ready to take off in data.”

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