The Wireless Carrier Timeline & Industry Evolution: Pre-1983 ‐ Present
© 2014 Steel in the Air, Inc.
In 1984, the FCC required that the Bell Company divest its assets, which it did by splitting into seven “Baby Bells”: Ameritech, BellSouth, Pacific Telesis, Southwestern Bell, Bell Atlantic, NYNEX and U.S. West. Thirty years later, we have what is known as “The Big Four” players: Verizon, AT&T, Sprint and T-Mobile. Verizon and AT&T have been serious rivals since circa 1997-1999 when the Baby Bells began to remarry and British Vodaphone threw its chips in with Bell Atlantic/ NYNEX to form Verizon. During the very intense decade (1995 – 2005) that resulted in AT&T finally organizing its lineage and rebranding as AT&T, it underwent a series of mergers, divestitures and partnerships that are best explained in the timeline below.
The nation’s #3 and #4, Sprint and T-Mobile, both which are majority-owned by German and Japanese companies respectively, are now talking about merging. If they are granted FCC approval, their numbers (total subscribers as well as POP) will be within a few percentage points of both Verizon and AT&T.
In addition to the Big Four, there are hundreds of regional wireless carriers in the U.S., but only ten with more than 300,000 subscribers. Take a look at our timeline below, and let us know if you have any questions or comments.
All logos are trademarked and are the property of their respective companies. Steel in the Air has no affiliation with any of the companies citied in our wireless timeline.
|Leap Wireless (Cricket)
|C Spire Wireless
|In 1889, AT&T became head of the Bell Co., where it remained until the divestiture of 1984. In 1963, MCI was founded as Microwave Communications. The name changed to MCI in 1971. In 1974, MCI filed an anti-trust lawsuit against AT&T, resulting in the Bell divestiture.||AT&T on behalf of the Bell Co., engineered the first commercial cellular system in Chicago and Baltimore/D.C.||The Bell Co. divested into the 7 Baby Bells: Ameritech, BellSouth, Pacific Telesis, Southwestern Bell, Bell Atlantic, NYNEX and U.S. West. MCI was the first carrier to deploy fiber-optic cable (between NYC and D.C.).||Bell Atlantic bought Metro Mobile CTS.||NYNEX spun off NYNEX Mobile. then merged with Bell Atlantic Mobile.||Pacific Telesis spun off its wireless service as Airtouch.||Air Touch and New Vector (US West’s wireless division) merged.||In the second largest merger in corporate history, Bell Atlantic merged with with NYNEX and spun off Bell Atlantic Mobile.||MCI was acquired by WorldCom and the name was changed to MCI WorldCom. Air Touch acquired New Vector.||British Vodaphone purchased AirTouch. Bell Atlantic partnered with Vodaphone Airtouch to create Verizon Wireless.||Bell Atlantic acquired GTE and brought it into Verizon, creating the nation’s largest wireless company. MCI WorldCom rebranded as WorldCom. Qwest purchased US West.||WorldCom filed for bankruptcy (which at the time was the largest Chapter 11 filing in hisitory) and reemerged as MCI.||Verizon acquired MCI.||Verizon acquired Alltel.||Verizon acquired Centennial Communications and was required by the FCC to divest five markets to AT&T.||ATN acquired Alltel’s assets, which Verizon was required to divest.||Verizon acquired Terremark Worldwide, Inc., a global provider of managed IT infrastructure and cloud services, as well as CloudSwith, a cloud software provider.||Verizon purchased a 20 MHz block of AWS (1.7/2.1) spectrum from dComcast, which was promptly bought by AT&T. As of August, 2012, Verizon owned these spectrum licenses: 29.4% of 700 MHz; 25.2% of Cellular (850 MHz); 20.6% of PCS (1.9 GHz); and 32.1 AWS (1.7/2.1).||In January, 2014, Verizon sold its lower 700 MHz spectrum to T-Mobile. The deal is expected to close by second quarter 2014.Verizon Wireless acquired Cincinnati Bell’s cellular assets and spectrum.||Verizon currently serves ~ 114 million subscribers and owns ~48,000 cell sites nationwide.|
|In 1889, AT&T became head of the Bell Co., where it remained until the divestiture of 1984. In 1963, MCI was founded as Microwave Communications. The name changed to MCI in 1971. In 1974, MCI filed an anti-trust lawsuit against AT&T, resulting in the Bell divestiture.||AT&T on behalf of the Bell Co., engineered the first commercial cellular system in Chicago and Baltimore/D.C.||The Bell Co. split into the 7 Baby Bells: Ameritech, BellSouth, Pacific Telesis, Southwestern Bell, Bell Atlantic, NYNEX and U.S. West. Afterward, AT&T acted solely as a long-distance provider.||MCI spun off McCaw Cellular.||Southwestern Bell bought the Baltimore/ D.C. cellular system and acquired Metromedia’s mobile division.||BellSouth bought Mobile Communications Corp and spun off Bellsouth Mobility.||BellSouth bought Air Call Communications Corp.||Southwestern Bell bought McCaw Communications and formed the form the Cellular One Group, which was joined by Vanguard Communications. The Cellular One group rebranded its wireless service (including McCaw Cellular) as Cellular One.||Pacific Telesis spun off its wireless service as Airtouch.||Southwestern Bell rebranded as SBC Communciations.||The Cellular One Group opened its doors to independent wireless providers and was joined by Southern New England Telephone (SNET). AT the time, it served over 69% of U.S. subscribers.||SBC purchased Pacific Telesis.||Southwestern Bell rebranded as SBC Communciations, and was in the process of acquiring McCaw Cellular, Comcast Cellular, Vanguard Communications, Lin Broadcasting, SNET and 50% of Ameritech, making SBC the nation’s largest wireless services provider. (The acquistions were finalized by 1999).||AT&T completed its merger with TCI and reentered the consumer local telephone business in NYC. As head of the Cellular One Group, SBC bought 50% of Ameritech. Leap Wireless was founded as a spin off from Qualcomm, and branded its wireless division as Cricket.||SBC and BellSouth merged their wireless operations to create Cingular Wireless.||AT&T launched AT&T Broadband and AT&T Wireless. AT&T Wireless became an independent company.||AT&T Broadband was bought by Comcast.||Cingular Wireless bought AT&T Wireless, making Cingular the largest wireless provider in the U.S.||SBC bought AT&T, consolidating ownership of Cingular Wireless and, re-branded as AT&T.||AT&T and BellSouth merged.||AT&T acquired Centennial Communications. AT&T purchased Dobson Cellular and divested its assets, including the Cellular One brand, to Trinity Partnerships.||Verizon acquired Centennial Communications and was required by the FCC to divest five markets to AT&T.||As of August 2012, AT&T owned these spectrum licenses: 35.9 of 700 MHz; 43.6% of Cellular (850 MHz); 26.4% of PCS (1.9 GHz); and 6.2 AWS (1.7/2.1).At&T signed over 50 spectrum deals, including purchasing spectrum that Verizon was required to divest.||In January, 2013, AT&T announced its intent to acquire ATN’s U.S. wireless operations (dba Alltel Wireless). This deal was approved by the FCC in September, 2013. In October, Crown Castle purchased 9,700 towers from AT&T||AT&T acquired Leap Wireless (Cricket) for $1.2 billion.||AT&T currently serves ~120 million subscribers, more than any other wireless service provider. It owns ~57,000 cell sites nationwide.|
|The Brown Company originated in1889. By 1925, through a series of mergers, it became known as UT&E, and was the nation’s second largest telephone company. Following the Great Depression, UT&E reemerged as United||GTE, an independent phone company, spins off a long-distance service and brands it as Sprint. It then merges with US Telecom, which has roots going back to 1899.||Nextel was founded.||United Telecom completed the acquistion of Sprint and separated the company into two divisions: United Telecom for local services and Sprint for long distance. They then created the first nationwide fiber optics network.||Sprint partnered with Centel.||Nextel acquired Motorola’s SMR spectrum licenses.||Sprint launches the nation’s first PCS network.||Sierra Technologies spun off assets to form Clearwire.||Sprint built the first nationwide PCS network.||Nextel becamse the largest all-digital wireless provider in the U.S. Sprint sold its GSM network to Omnipoint, moving its subscribers to its CDMA network.||Sprint purchased Nextel and rebranded as Sprint Nextel. Sprint Nextel acquired Fleet Call.||Sprint Nextel acquired four of its ten wireless affiliates: US Unwired, Gulf Coast Wireless, IWO Holdings and Ubiquitel.||Sprint Nextel completed the acquisition of Northern PCS.||Sprint Nextel purchased the majority share of Clearwire and the two companies merged their broadband networks.||Sprint acquired iPCS, one of its last remaining affiliates.||In December, 2010, it rolled out its Network Vision plan.||As of August 2012, Sprint owned licenses to the following portions of the available spectrum: 97.2% of SMR (800/900) MHz and 21.1% of PCS (1.9 GHz). Sprint Nextel purchased 20MHz of spectrum and 585,000 customers from U.S. Cellular.||In July, 2013, Sprint completed its acquistion of Clearwire, including its high-frequency spectrum licenses. In the same month, Sprint merged with Softbank, who owns the majority share (72%).||Sprint currently serves ~57.5 million subscribers and owns between 55K to 80K cell sites (including Clearwire and Nextel sites)|
|Western Wireless was formed by the merger of Pacific Northwest Cellular and General Cellular Corp. MetroPCS was founded.||Voicestream was spun-off as Western Wireless’ wireless division.||Voicestream and Omnipoint merge.||Voicestream was acquired by German-based Deutsche Telecom, which rebranded as T-Mobile.||T-Mobile partnered with UK-based Orange.||Crown Castle Purchased 7,200 cell towers from T-Mobile. As of August 2012, T-Mobile owned licenses to the following portions of available spectrum: 0.1% of Cellular (850 MHz); 19.6% of PCS (1.9 GHz); and 34% of AWS (1.7/2.1 GHz).||T-Mobile merged with MetroPCS. In July, T-Mobile agreed to purchase 10 MHz of AWS spectrum from U.S. Cellular.||In January, 2014, T-Mobile bought Verizon’s lower 700 MHz band of spectrum in a deal that will close in Q2 2014.||T-Mobile currently serves ~57 million subscribers and owns over 55K cell sites.|
|Telephone and Data Systems, Inc. (TDS) began operating as a rural phone provider in 1969.||TDS created U.S. Cellular as a subsidiary.||U.S. Cellular sold 20MHz of spectrum and approximately 500,000 customers to Sprint.||In July, U.S. Cellular agreed to sell T-Mobile 10 MHz of AWS spectrum.||U.S. Cellular currently serves ~5 million subscribers across 23 states.|
|Leap Wireless was founded as a spin off from Qualcomm, and branded its wireless division as Cricket.||As of August 2012, Leap owned licenses to the following portions of tspectrum: 0.6% of 700 MHz; 2.3% of PCS (1.9 GHz); and 6.6% of AWS (1.7/2.1 GHz).||In July, AT&T announced plans to acquire Leap Wireless for $1.2 billion. The deal will close in first-quarter 2014. AT&T will retain the Cricket brand name and extend its LTE network to Cricket customers. Leap Sold $6 million worth of PCS spectrum to C Spire.||AT&T acquired Leap Wireless. AT&T will retain the Cricket brand name and extend its LTE network to Cricket customers||Leap serves over 4.8 million subscribers, and owns ~12,500 cell sites.|
|Telapex created Cellular South as a privately-held wireless provider.||Cellular South purchased Corr Wireless.||Cellular South rebranded as C Spire Wireless.||C Spire purchased $192 million worth of 700 MHz spectrum C Spire Wireless filed a federal anti-trust lawsuit against AT&T alleging that AT&T conspired to create a discriminatory spectrum band which would run smaller carriers out of business.||C Spire acquired $6 million worth of spectrum from Leap Wireless.||C Spire serves approximately one million subscribers and owns approximately 1,500 cell sites.|
|Atlantic Tele-Network (ATN) was founded as a local exchange carrier in Beverly, Massachusettes.||ATN acquired the majority share of Guyana Telegraph and Telephone.||ATN acquired Virgin-Islands based wireless carrier, Choice Communications.||ATN acquired rural U.S. provider, Commnet.||ATN acquired New-England based Sommnet||ATN acquired Alltel’s assets, which Verizon was required to divest.||In January, 2013, AT&T announced its intent to acquire ATN’s U.S. wireless operations (dba Alltel Wireless). This deal was approved by the FCC in September, 2013.|
|The Clifton-Forge Wayneboro Telephone Company (CFW) was founded 1897.||CFW merged with R&B Communications and changed its name to nTelos.||nTelos filed for bankruptcy and ownership was transferred to creditors.||Morgan Stanley purchased 94% of the company’s assets.||nTelos serves over 450,000 subscribers, and owns over 1,400 cell sites. nTelos currently uses 23 MHz of its 1.9GHz spectrum holdings to support its CDMA services. Approximately 20 MHz of its 1.7/2.1 band has yet to be deployed.|
|Cincinnati Bell originated as the City and Suburban Telegraph Co. in 1873. In 1878, as part of the Bell Co., it gained rights to the Cincinnati area.||At the time of the Bell divestiture, AT&T owned a minority share of Cincinnati Bell.||Cincinnati Bell acquired IXC Communications and changed its name to Broadwing Communications||Cincinnati Bell divested its long-distance operations as Broadwing and changed its name back to Cincinnati Bell.||Cincinnati Bell serves approximately 320,000 wireless subscribers. Cincinnati Bell controls 50 MHz of spectrum in the Cincinnati area and 40 MHz in Dayton, Ohio, which are spread between the 1.7/2.1 GHz and 1.9 GHz bands.||Verizon Wireless acquired Cincinnati Bell’s cellular assets and spectrum.|
U.S. Wireless Carriers: A Historical Perspective
The history of cell phone carriers began before the invention of the cell phone. In 1877, the American Bell Telephone Company (named after Alexander Graham Bell) opened its first local exchange in New Haven, Connecticut. Within a few years, local franchises were established in every major city in the United States. The franchises (Bell Operating Companies or "BOCs") were operated by American Telephone and Telegraphic (AT&T), originally known as "the long-distance company". In 1889, AT&T acquired the assets of American Bell, becoming the head of the Bell System, and remained as such until its break-up 84 years later.
In 1893, in St. Louis, inventor Nikola Tesla demonstrated the first wireless transmission of electro-magnetic energy (the first public display of radio), which pioneered the way to modern day wireless communications. In 1894, Alexander Graham Bell’s second telephone patent expired, opening the industry up to competition (within a decade, over 6,000 regional providers emerged.). In 1901, Guglielmo Marconi, founder of the Wireless Telegraph and Signal Company, transmitted the first wireless signal across the Atlantic from North America. In 1905, Tesla designed the world’s first cell tower – The Wardenclyffe Tower, and construction began in Shoreham, New York. Due to a lack of funding the project was never completed, although had it been, it’s safe to say that wireless communications could have reached mainstream distribution long before it did.
Over the next decade, telephone companies focused on building their networks using landlines. In 1915 (two years after the Bell System became a government sanctioned monopoly), Alexander Graham Bell made the first transcontinental telephone call using the world’s longest telephone line, which consisted of 2,500 tons of copper wire, 130,000 poles, three vacuum-tube repeaters, and countless numbers of loading coils. However, telegraphy remained the cheapest way to communicate long-distance until the end of the 20th Century. In 1920, AT&T developed the frequency multiplying complex, which allowed speech to be shifted amongst various frequency bands, enabling several telephone calls to happen simultaneously (and eventually eliminating the switch-board).
Even though the AT&T monopoly was sanctioned by the government (and remained so until its activities began to be restricted in 1956), many regional telephone and telegraph companies existed, such as the Brown Company, which was founded in 1899 to service Kansas, and through a series of mergers and acquisitions, was recognized as the nation’s second largest telephone company, United Telephone and Electric (UT&E), in 1925. The Great Depression caused over 3 million telephone subscribers to lose their service, and along with that, the bankruptcy and dissolution of UT&E, a major player in the telecom industry (Sprint traces its roots and operational infrastructure to the original Brown Company).
In the 1940s, AT&T began experimenting with cellular technology. Initially, a single antenna was used to service an entire region, with a capacity of just 20 simultaneous calls. Although not a cellular system, in 1946, Bell initiated America’s first commercial mobile radio telephone system. Bell, along with Ericsson, Nokia and Motorola proceeded to develop wireless telecom technologies throughout the 1950s and 60s, however it took over thirty years of dedicated technological innovations for the world’s first automated cellular network to launch – in Japan in 1979.
The FCC first allocated spectrum for wireless telecom radio systems in the 1970. In 1973, Motorola’s Martin Cooper was credited with inventing the handheld “cellular radio telephone.” Experimental wireless (cellular) systems were first deployed in Chicago and in the Washington D.C. / Baltimore corridor in 1977, and in October 1983 (the year after the FCC decided to allocate spectrum for cellular usage), the first commercial cellular system began operating in Chicago (led by Ameritech Mobile), closely followed by the launch of a cellular system in Baltimore / D.C. (serviced by CellularOne) In March, 1983, the DynaTAC mobile phone launched using the first U.S. 1G network, hosted by Ameritech (a Baby Bell).
In 1982, the history of cell phone carriers took another turn with the break-up of AT&T (which resulted from an anti-trust lawsuit initiated by MCI in 1974) was mandated based on a consent degree with the United States Interstate Commerce Commission. Effective January, 1984, AT&T was apportioned into seven independent regional holding companies, affectionately known as "Baby Bells." The Baby Bells were: Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell and US West. In addition to these seven, there were two companies that were only partially owned by AT&T, which functioned as monopolies in their respective coverage areas: Cincinnati Bell and Southern New England Telephone (SNET). The Interstate Commerce Commission, who was responsible for the break-up of American Bell, designated 734 markets (306 metropolitan and 428 rural) nation-wide, and allowed the newly formed wireless carriers to apply for spectrum licenses to service these areas. (Click here to see the U.S. Frequency Allocation Map). In an effort to deter monopolies in the telecom industry, the Commission decided that cellular service would be competitively provided by at least two carriers per market. The breakup did, indeed, lead to a surge of competition from new telecommunications companies, such as Sprint and MCI.
In 1985, there were just 340,213 mobile phone subscribers, but by 1990 this number had already surpassed 5 million. This was the year that the FCC reallocated spectrum at 2 GHz for emerging digital mobile services. In 1992, the first cellular system using CDMA technology was successfully launched by Qualcomm. At 2012 year-end, there were 326.4 million subscribers in the U.S. alone. By 2014, the surge in data wireless networks are projected to carry 40 times the capacity they carried in 2009, mostly due to mobile devices and data traffic. In fact, by 2020, a majority of people in the world will be using their mobile devices (Smartphones and tablets) as their primary Internet tool.
The telecom industry’s race to gain control of the largest population mass of potential consumers has been a long-standing American tradition. Today, there are 4 major wireless players that service the vast majority of the market (“The Big Four”), and over one hundred small facilities-based providers that serve specific geographical areas – mainly rural. Since the Telecom Act of 1996, which loosened Federal restrictions placed on carriers, these smaller providers have been consolidating with larger companies. In fact, its been difficult for them to remain independent. AT&T and Verizon are competing neck-to-neck for dominant control of the market with Sprint and T-Mobile just around the bend. Consumer demand for wireless voice and data services shows expected exponential growth. Cisco projects that mobile data will, at the very least, double between 2013 and 2018, while Ericsson estimates that data growth will increase by 38% each year between 2013 and 2018. The trend is likely due to proliferation of smartphones and tablets in households as well as the growth in streaming videos, which is spurred, in part, by faster networks.
CTIA’s Wireless Industry 2013 Year-End Report, as published by the FCC.
Wireless Carriers and Spectrum
Wireless carriers use portions of the electromagnetic spectrum (corresponding to radio frequencies) to satisfy their subscribers’ needs for mobile broadband (voice and data) services.
In the United States, the FCC is in charge of allocating spectrum for various purposes, and when it “releases” spectrum, it traditionally becomes available for purchase via an auction process, wherein the highest bidder wins. However, there are rules: The FCC imposes a limit on “spectrum aggregation,” which happens when one company owns more than 33% of the licensed airwaves in any given market. The rules are typically enforced when one company buys another and acquires its spectrum assets.
Recently wireless carriers have been petitioning the government in an attempt to convince the FCC to release additional spectrum for purchase, stating that its necessary to effectively meet consumer demand. The FCC has responded, in part, by suggesting that new technologies should be deployed that would prepare carriers for “spectrum sharing.” A report by the President’s Council of Advisors on Science and Technology (PCAST) stated that spectrum sharing would “multiply the effective capacity of spectrum by a factor of 1000.” Wireless leaseholders would see this effect by an increase in carrier collocation on towers. In addition, since sharing of the same spectrum would naturally imply the use of standard technologies, leaseholders can also expect to witness a nationwide rollout of LTE upgrades to existing cell sites.
Below is a table, dated June 2014, which shows the percentage of spectrum allocations measured by a population-weighted average.
|Wireless Carrier||700 MHz||850 MHz (Cellular)||800/900 MHz (SMR)||1.9 GHz (PCS)||1.7 GHz (AWS1)||2.1 GHz (AWS4)||2.3 GHz (WCS)||2.5 GHz (BRS)||2.5 GHz (EBS)|