Justice Department Probes US Wireless Carriers' Work on SIM Card Alternative

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AT&T Inc and Verizon Communications Inc are under investigation by USA antitrust officials over whether the companies worked with an industry standards group to make it tougher for consumers to switch wireless carriers, according to two people familiar with the matter.

The investigation is said to be into potential coordination by the companies to thwart eSIM technology. eSIM technology would allow users to switch wireless providers remotely without having to change the SIM card.

A new technology called eSIM, or electronic SIM, which is being promoted as a new standard by the GSMA, allows customers to more easily move their phones between different carriers.

Representatives for the carriers and the industry group declined to comment to the Times.

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Verizon spokesman Rich Young said in an emailed statement that the matter is "a difference of opinion with a couple of phone equipment manufacturers regarding the development of e-SIM standards".

A Justice Department spokesperson declined to comment, saying in an email that "as a matter of policy, the Department of Justice does not confirm, deny, or otherwise comment, on the existence or nonexistence of investigations". This inherently obviates the best aspect of the technology in order to make it harder for customers to switch carriers.

Verizon, which is based in NY, derided the accusations on the issue as "much ado about nothing" in its statement. He said the company will continue to work with federal officials until they come to a "mutually acceptable solution".

AT&T and Verizon together control about 70 percent of all wireless subscriptions in the United States. As subscriber growth in the mobile market slows, retaining customers is a top priority.

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The report notes that the two carriers handle about 70% of U.S. wireless customers, and that the eSIM tech makes it easier to switch carriers.

At the heart of the investigation is whether the nation's biggest wireless carriers, working with the GSMA, secretly tried to influence mobile technology to unfairly maintain their dominance in a way that hurt competition and consumers. Verizon closed down 1.1 per cent to US$47.90 after losing as much as 2.5 per cent. AT&T, which is fighting the Justice Department's efforts to block its takeover of Time Warner Inc, dropped 1.9 per cent but recovered to close at US$34.67, down 0.4 per cent.

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