A History of the Big Four US Carriers

While one of the current cell phone carriers can trace their roots all the way back to 1885, this article is based on the era starting when Dr. Martin Cooper made his first call on a Motorola portable cell phone that he created in 1973. You will read about the evolution of the four major cell phone carriers of today, Verizon Wireless, AT&T, Sprint Nextel and T-Mobile. These histories are brief looks into these companies. I have attached the reference links I used for each company if you want to see the entire stories. The carriers are in the order of the total number of subscribers (or customers or connects…oh let’s not get into that again) as of the end of 2010. To keep this article from being 100 pages I am, for the most part, telling you the US stories of these companies. You will be amazed how intertwined these companies roots are. So sit back, relax and enjoy.

Verizon Wireless

In April of 2000, Bell Atlantic Mobile (which actually came from AT&T which you will see later), the US portions of the UK company Vodafone (AirTouch and PrimeCo) and GTE, merged together to form Verizon Communications( Verizon being a combination of the Latin words VERITAS and horizon). At the time it was one of the largest mergers in US history valued at more than $52 billion. When the final merger was approved and completed in June of 2000, Verizon Communications (55% owner) and Vodafone (45% owner) officially named the new company Verizon Wireless as an independent wholly owned company. What that means, there is no “Verizon Wireless” traded on any stock exchange. Both Verizon Communications and Vodafone are traded on the New York Stock Exchange but not Verizon Wireless.

The merger brought together carriers from the west coast, AirTouch, east coast, Bell Atlantic, and the mid west, GTE and created the largest singular (no, not Cingular…I will talk about them later), wireless carrier in the US. Since the merger and creation of Verizon Wireless, there has been a relentless battle between AT&T and Verizon Wireless to be the top dog in total customer activations. Both have either merged with or acquired companies multiple times. Each of these transactions would vault one over the other in total customers. In 2006, Verizon bought MCI, in 2008 Rural Cellular Corp. and in 2009 Alltel. Interestingly, when Verizon bought out Alltel, as part of the buyout, Verizon had to sell 105 overlapping local wireless properties. Guess who bought up most of those? Right, AT&T!!

I went to work for Verizon Wireless about 6 months after the merger and I can tell you it was a bit of a mess. At the time there were over 25 different billing systems and over 100 different regional cell phone plans. If you lived in New York and wanted to use you phone in California, you had to pay huge roaming fees even though technically you were using the same network. Of course today, all plans are national and roaming charges hardly ever exist.

For 2010 Verizon Wireless had $63.4 billion in sales revenue and ended with 94.1 million customers and 102.2 million connections.

Here is the link for the entire history of Verizon Wireless:

http://investor.verizon.com/profile/history/index.aspx?tabId=1

AT&T Wireless

This one is going to be fun. Hang with me and I promise it will all work out in the end, I hope. AT&T (Atlantic Telephone and Telegraph), as a company, dates back to 1885 when it was created by its parent company, Bell Telephone (yes, Alexander Graham Bell). In 1899, AT&T actually attained all the assets of the Bell Company and became the parent company (kind of like when we get old and go back to be burdens on our children). In 1982, AT&T was broken up when it was declared a monopoly by the government (that’s the simple version). The result was the formation of AT&T and seven other companies under the “Bell” name or Baby Bells. One of these “baby” bells was Bell Atlantic (sound familiar…Verizon…Hmm). Ok, so now you may be are asking “what does this have to do with cellular”? Not much really, I just wanted you to give you some background.

AT&T wireless actually got started when AT&T Corp. purchased McCaw Cellular out of Redmond, Washington in 1994. McCaw Cellular, at the time, was the largest cellular provider in the US with 2 million customers. In 2000, AT&T Wireless became a publicly traded company and in 2001 it became a separate company. It was no longer a division of AT&T Corp. In 2004, AT&T Wireless went up for bid. The two bidders were Cingular and Vodafone (yes, the same Vodafone who owned 45% of Verizon Wireless). Just in case you are wondering, if Vodafone would have won the bid they would have had to sell their 45% share to Verizon Communications. To this day, Verizon Communications has been trying to convince Vodafone to sell them the rest of Verizon Wireless. Sorry, I forgot we were talking about AT&T. Obviously, Vodafone did not win the bid and Cingular (who was owned by two Baby Bells, Bell South and SBC), took over. The AT&T Wireless name was wiped out forever, forever, forever (well not really, but it does add dramatic effect).

Ok, this is where the fun really starts. In 2006, SBC acquired AT&T Corp. and renamed the company AT&T Inc. So now, AT&T Inc. owned 60% of Cingular. Later in 2006, AT&T Inc. acquires Bell South, who owns 40% of Cingular. Once the merger is complete, Cingular is changed to AT&T Mobility a division of AT&T Inc. In 2007, AT&T Inc. decided to wipe out the Cingular name and replace it with AT&T Wireless. Hence, the circle of life is complete. Whew!!!!!

AT&T has yet to announce its 2010 earnings. The last report had them at around 85 million customers and around 95 million connections.

Here are some links to AT&T’s history (I also included Cingular)

http://www.corp.att.com/history/
http://en.wikipedia.org/wiki/AT%26T_Wireless_Services
http://en.wikipedia.org/wiki/Cingular

Sprint

AT&T is not the only company to have deep and long American roots. Sprint goes all the way back to 1899 when Cleyson Brown created Brown Telephone Company. In fact, those two powerhouses, Brown Telephone and AT&T, went toe-to-toe back then in Kansas for many years. Unfortunately, Brown could not compete and had to file for bankruptcy. In 1938, Brown reemerged from bankruptcy as United Utilities. It stayed that way until 1972 when the name changed to United Telecommunications. In 1983 United Telecom offered cell phone service in the Midwest and south under the name Telespectrum.

On the west coast, Southern Pacific Communications Company or SPC, a division of the Southern Pacific Railroad, had a used a microwave network for internal communications. Since the company already had the “rights of way” for a network, it laid out cables for private line use. Once the FCC approved the use of voice over these lines in 1978, Southern Pacific needed a new name to differentiate the new company. An internal company contest yielded the name Sprint (Southern Pacific Railroad Intelligent Network of Telecommunications) Yep, that’s what “Sprint” stands for.

Ok, on to wireless sort of. There is still a little story needed before we get there. In 1982 SPC became part of GTE (yes that GTE which later became part of Verizon. Are we having fun yet?) under the name GTE Sprint. In 1986, US Sprint was formed. Remember when I mentioned Telespectrum? In 1986 US Sprint sold Telespectrum off to Centel taking Sprint all but out of the wireless business. But, in 1995, Sprint acquired Centel thrusting them back into the wireless business. Just prior to the reacquisition Sprint sold off the remaining small analog wireless network they had to a little company called Alltel (Yep, Verizon’s Alltel), to be able to start a new all digital network called PCS. In 1997, under the Sprint Spectrum name, Sprint PCS became the first all digital nationwide network running on the CDMA technology. Another funny note here, Sprint Spectrum still had one GSM band in the Washington DC area that they sold off to VoiceStream. Does anyone know who VoiceStream turned into? That’s right, T-Mobile.

The name officially changed from Sprint PCS to Sprint Nextel with the 2004 merger of the two companies. Sprint has been probably been the most inventive company in wireless. Here are a few of its “firsts” in the industry:

World’s first Public Data Network, first nationwide 100% digital fiber-optic network, first carrier to offer commercial Internet access, first major company to provide local, long distance and wireless services, first nationwide 100-percent digital PCS wireless network, first wireless carrier to complete a nationwide Third Generation (3G) 1X network upgrade, first major U.S. provider to begin conversion of local circuit-switched network to a next-generation packet network, first major wireless carrier to provide 4G Wi-Max service.

Sprint has posted that their 2010 earnings will be announced on February 10th, 2011. The last report has them at 48.8 million customers.

Here are some links to Sprint’s history:
http://en.wikipedia.org/wiki/Sprint_Nextel
http://www.sprint.com/companyinfo/history/

Nextel

While Nextel is now a part of Sprint, I think it is important to tell part the story separately. From 1987 to 2004 Nextel was considered a major carrier and has its own history I think you will enjoy. Nextel also introduced many “firsts” in the industry that I will tell you about a little later.

Nextel started in 1987 as FleetCall. The company started by using a Specialized Mobile Radio (SMR) system for communications. Basically, this is a two-way radio system that was used for dispatching taxi cab fleets (hence the name FleetCall). FleetCall starting buying up as many of the SMR licenses it could in anticipation of building out a new communications system for private use. In 1993, the company name was changed to Nextel since FleetCall referenced the old style technology. There is no reference to what Nextel actually stood for. The best guess is next generation telecommunications. Working with Motorola, Nextel built out the iDen network and became a major nationwide carrier. The iDen network is based on the old two-way radio communication. That is the reason why Nextel’s push-to-talk has been the most successful of all the carriers. Oh, I forgot to mention, in 1995 Craig McCaw (sound familiar? Check out the beginnings of AT&T wireless) invested over $1 billion dollars in Nextel.

Some industry firsts for FleetCall and Nextel:

First company to provide unlimited calling plans to a large customer base, first company to implement a nationwide push-to-talk system, one of the first providers to offer a national digital cellular coverage footprint, first to integrate global positioning system features into their phones and to complete their 2G network upgrade, first to combine digital cellular, two-way radio and text-numeric paging in one phone, first to introduce a wireless JavaTM phone in North America, first carrier to provide access to live streaming video.

This is a very brief telling of a much more in-depth company history. Here are some links if you wish to see the whole story:

https://www.fundinguniverse.com/company-histories/Nextel-Communications-Inc-Company-History.html
http://en.wikipedia.org/wiki/NEXTEL
http://www.sprint.com/companyinfo/history/

T-Mobile

This one will be much easier to describe. In 1999, VoiceStream Wireless became an independent company from Western Wireless. In 2001, German telecommunications giant, Deutsche Telekom the parent company of the largest German mobile phone operator T-Mobile, was looking for a way to get into the US market just like its main rival in Europe Vodafone had done the year before. VoiceStream Wireless came up for sale and Deutsche Telekom snatched it up quickly. In 2002, the US affiliate of T-Mobile was launched. That’s pretty much it. I told you it was going to be easy.

Even though it has a short history, T-Mobile has had some firsts in the industry:

First to deliver the BlackBerry® wireless handheld e-mail solution with integrated phone, first wireless carrier to introduce video messaging services in the United States-and customers start sending and recording full-motion, full-color, full-sound messages from their wireless phone.

T-Mobile has yet to report its 2010 earnings. At last report it has 33.8 million customers.

Here are some links in case you want to check out what little more there is:

http://en.wikipedia.org/wiki/T-Mobile_USA
http://en.wikipedia.org/wiki/T-Mobile
http://www.t-mobile.com/Company/CompanyInfo.aspx?tp=Abt_Tab_CompanyOverview&tsp=Abt_Sub_History

I hope you had as much fun learning about these companies as I did reading about, researching and writing about them. Remember, these are the past lives of these companies. I can’t wait to see what the future brings for all of them.


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