Mobile executives speak out at CTIA on buyouts, taxes

ATLANTA – Heads of six large U.S. mobile operators disagreed about industry consolidation, but slammed regulation and taxation by the states in a keynote panel Wednesday morning at the CTIA Wireless trade show in Atlanta.

The panel, which included Nextel Communications Inc. President and Chief Executive Officer Tim Donahue, Alltel Corp. President and CEO Scott Ford, Sprint Corp. President and Chief Operating Officer Len Lauer, Cingular Wireless LLC President and CEO Stan Sigman, T-Mobile USA Inc. Chairman John Stanton and Verizon Wireless Inc. President and CEO Denny Strigl, found agreement on most issues.

Consolidation gives operators more muscle to better serve subscribers, said Sigman, whose company last month agreed to acquire AT&T Wireless Services Inc. for about US$41 billion.

“Clearly, the consumer is the winner in this, because we’ll be able to deliver a much better network for them,” Sigman said. At the same time, consumers are getting more choice all the time with MVNOs (mobile virtual network operators) reselling mobile services on the main operators’ networks. In addition, VOIP (voice over Internet Protocol) is making wireline carriers more competitive with the mobile operators, he said.

Verizon’s Strigl had a different perspective.

“Consolidation isn’t going to do anything in the way of helping … the carriers who remain,” Strigl said. “People talk about, ‘Well, maybe we’ll see some stabilization of prices.’ Well, that’s crazy.” Even after a Cingular-AT&T merger there would be five national mobile operators and all mobile companies compete with wireline phone companies everywhere they do business, he said.

“The choice remains huge for the consumer, and what this does to the industry overall, having one fewer competitor, I think, is nothing. Nothing,” Strigl said.

However, Strigl expressed hope that the rollout of high-speed wireless data networks, such as Verizon’s BroadbandAccess service, will finally fulfill the long-delayed promise of mobile data.

“I am finally convinced that we have a product that as we build it, they will come,” Strigl said.

Business customers, particularly lawyers who send e-mail messages with large attachments, have embraced the service in its test markets of San Diego and Washington, D.C., he said.

Strigl and other panelists also expressed concern over increasing government regulation and taxation. For one thing, states are looking to the wireless business for tax revenue, Strigl said. The industry should wait a few years to see how recent federal regulations work out, but other government concerns are more urgent, he said.

“The bigger fear for us — and I think that this is perhaps the biggest issue in the industry — is what happens at the state and local levels. … Taxation at the state level is discriminatory, and it’s on wireless customers. We need to kick up our heels on this issue and make sure our customers don’t get nailed,” Strigl said, to applause from a large audience.

CTIA Wireless, sponsored by the Cellular Telecommunications & Internet Association, ends Wednesday.