Verizon Wireless offers Congress very slightly revised exclusivity terms
Now that the wireless telecommunications industry is under scrutiny by Congress and the US Department of Justice over handset exclusivity agreements and their effect on the industry, Verizon Wireless has yielded slightly to political pressure and eased up on its exclusivity. We emphasize slightly.
In a letter to congress, Verizon Wireless CEO Lowell McAdam said, "Any new exclusively arrangement we enter with handset makers will last no longer than six months -- for all manufacturers and all devices."
So VZW will be letting small wireless carriers have first crack at their handsets after a six-month exclusive period, as first reported by The Wall Street Journal this morning.
But the catch to this concession is that Verizon's definition of "small carriers" means those with 500,000 subscribers or less.
Just to provide a bit of perspective on that number: Most of the United States' Tier 2 wireless network operators -- the smaller, regional ones -- have well over a million subscribers. Leap/cricKet has an estimated 3.84 million, and metroPCS and US Cellular both have more than 6.1 million, even nTelos has more than 700,000 subscribers.
In fact, this is the smallest possible compromise Verizon could offer. As Fierce Wireless reported at the beginning of the year, there are only seven wireless networks with fewer than 7 million subscribers but greater than 250,000 in the US.
So the only carriers that will benefit from Verizon's concession are the smallest Tier 3 networks, the MVNOs (Mobile Virtual Network Operators) who lease spectrum from the bigger carriers.
McAdam went on to say, "This new approach is fair to all sides." A statement which could indicate that AT&T, Verizon, Sprint, and T-Mobile all have roughly the same tiny amount of MVNOs in the below-500,000 subscriber range.