Cellular South to quit CTIA, citing favoritism for bigger companies
Cellular South, a small wireless service provider in the South, has left CTIA, the wireless industry's main trade group, after years of what the company describes as favoritism toward its biggest and highest-paying members.
That favortism has turned up on issues that impact small carriers most, said Eric Graham, Cellular South’s vice president of strategic and government relations. On issues like handset exclusivity, data roaming, spectrum allocation and special access, CTIA has either been quiet or appeared to favor the Verizon Wireless or AT&T, the two largest carriers represented by CTIA, he said.
As a result, Graham said, AT&T and Verizon Wireless have only gotten bigger while other companies are struggling to maintain their monthly subscribers, with many losing customers.
The Federal Communications Commission is currently investigating whether the wireless industry is competitive enough. The agency is considering a range of issues, including roaming charges, the exclusive partnerships between handset makers and carriers and how much phone companies charge wireless providers for using their landlines to connect calls.
“The writing has been on the wall for a few years now and we are convinced the voice of the smaller carrier is being ignored,” Graham said. Cellular South chief executive Hu Meena had served on the CTIA's executive board but gave up his seat last year out of frustration. The carrier remains a member of trade group the Rural Cellular Association.
CTIA has argued that competition within the cellphone industry is healthy and that consumers have a wide range of choices. Citing FCC statistics, the group says that 95 percent of U.S. cellphone users are able to choose from at least three carriers. There are also more than 650 devices offered by 32 companies for customers.
CTIA is a nonprofit whose members include network operators such as Sprint Nextel and T-Mobile USA, device makers such as Motorola and Internet content companies such as Google. The group charges membership fees based on the revenues of the companies.
"We have active and meaningful dialogue with carriers of all sizes," said John Walls, vice president of public affairs for CTIA. "They are represented on our executive committee and our board of directors and we have opportunities for them to voice their specific concerns that we take quite seriously."
Cellular South has argued that CTIA’s data points belie other data that show smaller carriers are struggling while the two biggest carriers continue to grow. In the first three quarters of last year, AT&T added 3.4 million monthly subscribers and Verizon added 3 million. Sprint Nextel, the nation’s third-largest wireless provider, lost 3 million customers and T-Mobile USA gained about 100,000 customers.
“When a carrier goes to the capital markets to expand or upgrade their networks, the banks or bank groups look to the post paid customers for signs of health in that business,” Graham said.
He wouldn’t reveal the how many subscribers have left or joined Cellular South last year, saying it is a private company that doesn't reveal such statistics. Overall, it has 800,000 customers in Mississippi, Tennessee and Alabama.
January 19, 2010; 4:31 PM ET
Categories: AT&T , Early Termination Fees , FCC , Mobile , Sprint Nextel , T-Mobile , Verizon
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