Verizon is acquiring a 35-year-old wireless competitor that is shutting down as consolidation in the U.S. wireless market continues to accelerate.
For instance, in 2014, AT&T completed its acquisition of Leap Wireless, which owned Cricket Wireless, for $1.2 billion. Before the merger, Leap Wireless had almost 5 million customers through Cricket Wireless, making it the fifth-largest wireless carrier in the U.S. at the time.
In 2020, T-Mobile officially merged with growing rival, Sprint, for $26 billion. Sprint was the fourth-largest wireless provider in the U.S., with over 54 million customers.
Most recently, T-Mobile acquired UScellular’s wireless operations for $4.3 billion in August last year. Before merging with T-Mobile, UScellular had about 4.5 million customers and was the fifth-largest U.S. carrier.
Verizon expands customer base by acquiring Carolina West Wireless
Now, Verizon is following its wireless peers by purchasing Carolina West Wireless, which is permanently shutting down its services on Sept. 30, according to a message to customers on its website.
Carolina West Wireless has been offering wireless service in Western and Northwestern North Carolina for 35 years, serving roughly 90,000 customers.
“After careful consideration, the decision has been made to transition our wireless network to Verizon and discontinue our wireless services,” said Carolina West Wireless in a statement to PhoneArena.
“While this decision was not made lightly, it reflects a clear priority: ensuring that our customers and communities continue to have access to the very best connectivity – both now and for years to come,” it continued.
Over the past few years, Carolina West Wireless has struggled to maintain its cell sites due to an 80% reduction in funding from the Universal Service Fund, according to a recent report from Fierce Network.
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It also used to dominate about 60% of its coverage area; however, that percentage declined to 30% in 2024 amid rising competition.
Carolina West Wireless warned customers that starting July 1, they will need to “take action” to transition their wireless service to Verizon.
“For your convenience, Verizon representatives will be present at pop-up locations and all our retail store locations during normal business hours,” said the company on its website.
To lessen the blow of the upcoming transition, Verizon is offering Carolina West Wireless customers a $150 Mastercard gift card per line of service and is waiving activation fees if they switch to its network before July 30.
In a statement to TheStreet, RTMNexus CEO Dominick Miserandino said that the growing popularity of acquisitions in the wireless industry, such as the one between Verizon and Carolina West Wireless, can be both beneficial and troubling for consumers.
“The rapid consolidation of the wireless industry is a double-edged sword for consumers,” said Miserandino. “When smaller, regional networks fail, selling out to a giant like Verizon is often the only way to save the service. It brings immediate reliability to rural areas.”
“However, as the marketplace shrinks down to just three massive players, the consumer completely loses their leverage,” he continued. “When you eliminate local competition, you lose the only safety net that keeps national cell phone bills from creeping higher and higher.”
Verizon faces intensifying U.S. wireless competition
Verizon’s latest move comes after it acquired Frontier Communications for $20 billion in January, allowing it to expand its converged mobile and internet offerings to customers.
It is no secret that Verizon is facing elevated wireless competition, which is why it is taking bolder measures to reach more customers.
While the carrier is battling heightened promotional activity from AT&T and T-Mobile, it is also facing competition from mobile virtual network operators (MVNOs), which are increasingly gaining consumer interest due to their low prices.
A survey conducted by WhistleOut in December found that 34% of Verizon, AT&T, and T-Mobile customers plan to switch to an MVNO within the next year as they face high mobile plan pricing.
Verizon is also facing increased competition from cable providers such as Spectrum and Comcast’s Xfinity, which have attracted a surge of new mobile customers through converged cable TV, wireless, and internet offers in recent months.
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The rise of satellite mobile services is also another growing threat to Verizon. SpaceX’s Starlink Mobile recently surpassed 10 million subscribers, according to a report from SDX Central.
It currently partners with other wireless carriers, such as T-Mobile, to provide its service to U.S. consumers.
However, Starlink Mobile reportedly plans to build its own terrestrial U.S. mobile network and launch retail mobile service for consumers, rivaling Verizon, T-Mobile and AT&T, according to a recent report from The Financial Times.
“SpaceX will disrupt the $1.6 [trillion] communications industry, in our view,” wrote Oppenheimer analyst Timothy Horan in a June 3 analyst note, which was obtained by MarketWatch.
In addition to the rapid growth of SpaceX’s Starlink, Amazon plans to soon offer cellular coverage through the upcoming launch of its satellite network, Amazon Leo.
As wireless competition intensifies, a recent J.D. Power survey found that Verizon is struggling to surpass several of its rivals in consumer satisfaction with its postpaid phone plans.
Where Verizon lands in consumer satisfaction rankings for postpaid phone plans:
- The average consumer satisfaction score for postpaid wireless plans offered by traditional carriers is 603 on a 1000-point scale.
- In this category, T-Mobile led with ascore of 631, followed by Verizon at 593 and AT&T at 587.
- MVNOs outperformed the major carriers, posting an average consumer satisfaction score of 630 for postpaid phone plans.
- Within the MVNO segment, Consumer Cellular ranked highest at 721, with Google Fi Wireless coming in at 685 and Spectrum Mobile trailing the group at 614.
Source: J.D. Power
Related: Verizon drops 2 new plans as wireless customers flee high prices
