The United States authorities have started an investigation regarding alleged collusion by Verizon Communications and AT&T Inc to restrict customers from easily switching wireless carriers, according to a recently published report by Bloomberg citing sources familiar with the matter.
The two companies acknowledged the government probe and stated they are already working with regulators.
A technology called eSIM enables customers to switch wireless networks without inserting a new physical SIM card into their phones. Apple Inc, an innovator in the eSIM technology, along with some other equipment makers filed a complaint regarding the carriers’ practices, the report said.
Subsequently, the Justice Department sent demand to both the companies and mobile industry standards group GSMA for evidence on possible collusion and alleged efforts to hinder eSIM functionality.
U.S. regulators have emphasized on making it easier for customers to switch carriers. Back in 2013, four leading carriers, including Verizon, AT&T, T-Mobile and Sprint Corp, agreed that they will allow customers to use phones on other networks once their contracts expire. In 2014, President Barack Obama approved legislation, offering customers liberty to switch to the carrier of their choice without buying a new phone.
AT&T said it has provided information to the concerned department in response to its requests. It further said that the company will keep working with GSMA to move this issue forward.
Apple Inc. has introduced the technology in some of its iPad models a couple of years ago, though it hasn’t launched it in iPhones so far. T-Mobile and Sprint enable iPad users to switch between carriers using a menu on the device. Comparatively, AT&T allows users to use the eSIM, but doesn’t allow them to switch to another carrier, while Verizon doesn’t support eSIM functionality in iPads.
Shares of both Verizon and AT&T fell on Friday following the news.