As a retail and consumer expert who advises picky shoppers, I‘m often asked about the differences between America‘s top wireless carriers, AT&T and Verizon. Consumers want to know which one offers the best coverage, the fastest data speeds, the most attractive pricing, and the most innovative solutions. But many are also curious about the relationship between these two telecom behemoths. Specifically, does AT&T own Verizon?
It‘s a reasonable question given the companies‘ dominance in the market and the fact that they both trace their origins back to the Bell System monopoly. But the reality is more complicated. While AT&T and Verizon‘s histories are intertwined, they have been separate and fiercely competitive entities for over two decades now. Let‘s untangle the full story.
The Rise and Fall of Ma Bell
To understand why AT&T and Verizon are independent today, we have to go back nearly a century and a half. In 1877, the Bell Telephone Company was founded, with Alexander Graham Bell‘s revolutionary invention at its core. Over the subsequent decades, it rapidly expanded and evolved into the American Telephone and Telegraph Company, better known as AT&T or Ma Bell.
For much of the 20th century, AT&T enjoyed a government-sanctioned monopoly over telephone service in the United States. But by the 1970s, antitrust regulators had decided AT&T had too much power. Following a lengthy legal battle, in 1982 AT&T agreed to divest its local telephone operations, spawning seven independent regional holding companies known as Baby Bells.
Fast forward to 2000, and two of those Baby Bells, Bell Atlantic and GTE, merged to create Verizon Communications. The company‘s name, a portmanteau of "veritas" (Latin for truth) and "horizon", signaled its aspirations to expand into new technologies beyond traditional telephony. Indeed, over the subsequent decades both Verizon and AT&T would evolve into sprawling enterprises with diverse business lines.
Head-to-Head in the Modern Marketplace
Today, AT&T and Verizon remain the two largest wireless carriers in the United States by a significant margin. As of Q4 2022, AT&T reported a total of 202.1 million mobility subscribers across its consumer and business segments, edging out Verizon‘s 143.6 million total wireless retail connections. T-Mobile, the third largest competitor, had 113.6 million customers at the end of the year (source).
While postpaid phone customers are generally the most prized segment for wireless carriers, both companies also serve prepaid and wholesale customers and offer a full suite of connectivity solutions. In 2022, AT&T derived $83.6 billion of its $168.9 billion total operating revenue from its wireless mobility segment, with wireline and other services making up the rest (source). Verizon generated $74.5 billion of its $136.8 billion total revenue from wireless services in 2022, with broadband, business services, and other offerings contributing as well (source).
On the technology front, both AT&T and Verizon have been investing heavily to deploy 5G networks across the country. As of March 2023, AT&T stated that its 5G network covered more than 288 million people across over 22,000 cities and towns in the U.S. (source). Verizon reports that its 5G Ultra Wideband service, which includes high-band millimeter wave and mid-band C-band spectrum, reached more than 200 million people by the end of 2022 (source).
Comparing Costs for Consumers
Of course, coverage and speed don‘t tell the full story when it comes to wireless service. For many consumers, price is a deciding factor as well. Here‘s a quick comparison of the range of postpaid unlimited plans from AT&T and Verizon as of March 2023:
| Carrier | Plan Name | Monthly Price Per Line (with autopay) | Notable Features |
|---|---|---|---|
| AT&T | Unlimited Premium | $50 | 50 GB hotspot data, 4K streaming |
| AT&T | Unlimited Extra | $40 | 15 GB hotspot data, SD streaming |
| AT&T | Unlimited Starter | $35 | Unlimited talk, text, data (may be slowed during congestion) |
| Verizon | Get More | $55 | Unlimited premium data, 50 GB hotspot data, 12-month subscription to Walmart+ |
| Verizon | Play More | $45 | 25 GB premium data, 25 GB hotspot data, 6-month subscription to Apple Music |
| Verizon | Do More | $45 | 50% off connected device plans, 600 GB of Verizon Cloud storage |
| Verizon | Start | $35 | Unlimited talk, text, data (may be slowed during congestion) |
Pricing as of March 2023. Excludes taxes & fees. Additional terms may apply. Visit att.com or verizon.com for details.
As you can see, the entry-level unlimited plans from both carriers are identically priced at $35 per line, although each reserves the right to slow data speeds when the network is busy. The higher-tier plans offer more "premium" high-speed data allocations along with perks like streaming service subscriptions or connected device discounts.
Customer Satisfaction and Pain Points
Price and network quality are crucial considerations, but they aren‘t everything. Wireless carriers must also deliver a positive customer experience to earn long-term loyalty in a competitive market. Unfortunately, both AT&T and Verizon have room for improvement on this front.
In the American Customer Satisfaction Index‘s 2022 Wireless Service and Cellular Telephone Report, Verizon earned a score of 72 out of 100, putting it slightly above the industry average of 71 but behind T-Mobile at 74. AT&T brought up the rear among the Big Three with a score of 70 (source). Common customer complaints for both carriers include lengthy phone wait times for customer service, billing errors, and unexpected fees.
The Un-Carrier‘s Impact
In recent years, AT&T and Verizon‘s duopoly has faced an increasingly disruptive threat from T-Mobile. Dubbing itself the "Un-Carrier", T-Mobile has sought to differentiate itself with customer-friendly moves like eliminating annual service contracts, subsidized phone pricing, and data overage charges. It also merged with Sprint in 2020, creating a stronger third player in the market.
T-Mobile has been adding wireless subscribers at a faster clip than either AT&T or Verizon lately, putting pressure on both companies to respond with more competitive offerings. For example, in Q4 2022 T-Mobile added 927,000 net postpaid phone customers compared to 217,000 for AT&T and 217,000 for Verizon (source).
The Financial Footprint
As massive enterprises in a capital-intensive industry, both AT&T and Verizon have substantial financial heft. AT&T generated $168.9 billion in consolidated revenues in 2022 while Verizon recorded $136.8 billion. But there are some differences beneath the top-line numbers.
In terms of profitability, Verizon has had an edge lately with $30.4 billion in net income attributable to the company in 2022 compared to $16.9 billion for AT&T. That dynamic is reflected in the companies‘ operating margins of 23.1% and 14.9% respectively last year (source, source).
On the balance sheet, AT&T carried $132.9 billion in long-term debt as of the end of 2022 while Verizon had $139.1 billion in long-term unsecured debt. Both companies have substantial capital expenditure requirements to maintain and upgrade their networks. AT&T invested $23.2 billion in capex in 2022 and Verizon plowed $23.1 billion into capital spending (source, source).
The Duopoly‘s Impact on Consumers
With such dominant market positions, AT&T and Verizon inevitably invite scrutiny over whether their duopoly status is good for consumers. On one hand, the scale of these companies enables them to invest massive sums in building out nationwide networks and bringing new technologies like 5G to market. Consumers generally have access to reliable wireless service just about anywhere they go.
However, a market with only a few large players will inherently feature less price competition than one with many smaller rivals. The U.S. wireless industry has long been criticized for being an oligopoly with higher prices than other developed nations. A 2021 study from Finnish research firm Rewheel found that the U.S. had the most expensive wireless pricing among 50 countries surveyed, with a monthly price of €70.49 (about $84) for 100 GB of data (source).
Consulting firm Arthur D. Little noted that U.S. consumers spend much more for wireless service than those in comparable countries – about $81 per month in the U.S. in 2020 versus $19 in Italy or $21 in Germany (source). While many factors contribute to these price disparities, less competition is undoubtedly part of the equation.
Conclusion: Cooperation and Competition
AT&T and Verizon may no longer be part of the same corporate entity, but their fates remain as intertwined as ever. As the top two wireless providers in a consolidated market, each company‘s strategic moves inevitably affect the other. When one carrier introduces a new pricing scheme or rolls out a new technology, the other is quick to respond in kind.
At the same time, AT&T and Verizon must strike a delicate balance between competing vigorously for customers and avoiding an outright price war that would damage margins across the industry. This dynamic was evident in their recent cooperation around spectrum deployment aimed at accelerating 5G rollouts. But make no mistake – both companies still very much want to outdo the other in network performance, customer experience, and profitability.
For picky shoppers evaluating their wireless options, my advice is to look beyond the brand names and carefully compare coverage, pricing, and perks. While AT&T and Verizon are the default choices for many, don‘t overlook the potential savings and benefits of switching to T-Mobile or even a smaller regional carrier.
Ultimately, the question of whether AT&T owns Verizon is simple – it does not. But the implications of these two telecom titans‘ coexistence are anything but simple. Their massive scale allows them to deliver ubiquitous connectivity but can also translate to higher prices for consumers. As the 5G era unfolds, the onus will be on regulators to ensure that the wireless market serves customer interests even amidst ongoing consolidation. The future of the industry may be wireless, but wires still very much connect AT&T and Verizon.
