AT&T Inc. and Verizon Communications Inc. are under investigation by USA antitrust officials over whether the companies colluded to make it tougher for consumers to switch wireless carriers, according to three people familiar with the matter.
In theory, eSIM would make switching as simple as choosing a carrier directly on your device without the need to manually acquire and insert a physical SIM card from the provider. Harold Feld, a senior vice president of the non-profit consumer group Public Knowledge, told the Times that he was briefed about a meeting for a task force called G.S.M.A. "Nothing more." GSMA declined to comment. The sources further claim that the agency launched its investigation five months ago after receiving tips from a wireless carrier and at least one device maker.
Carriers like AT&T and Verizon have increasingly been losing subscribers to T-Mobile, thanks to more consumer friendly policies ranging from cheaper global roaming to the elimination of hidden fees and long-term contracts.
Sprint declined to comment, and representatives for Verizon, T-Mobile and the GSMA did not immediately respond to requests for comment.
In February, the Justice Department issued demands to AT&T, Verizon and the GSMA, a mobile industry standards-setting group, for information on potential collusion to thwart a technology known as eSIM, said two of the people, who spoke on the condition of anonymity because the details are confidential. Nothing more. We've been proactively and constructively working with the Department of Justice for several months regarding this inquiry and we continue to do so.
AT&T and Verizon together control about 70 percent of all wireless subscriptions in the United States.
AT&T is already locked in a legal battle with the Justice Department over its plan to acquire Time Warner. With an eSIM embedded in a handset, the user doesn't have to swap a SIM card on a phone to change carriers.
"A customer that owns a device that can be readily switched from carrier to carrier without even having to bring it in to the store, that's a world that would have much higher churn and lower profitability [for the carriers]", he said. Collusion to maintain their dominant positions in the market, assuming it happened, would be problematic and is the source of the DOJ's alleged investigation.
AT&T acknowledged the eSIM investigation in a statement.
The US government has argued in a trial that is nearing completion that the proposed deal would spur AT&T to charge its pay TV rivals more for Time Warner content.