Meet the Playaz
By Phil Downing
Just as in any media industry, cellular communications is controlled by a small group of huge corporations. There are two areas of the cellular communications industry: the companies that provide cell phone service and the companies that produce cell phone hardware.
In the American service market there are four major competitors: AT&T, Verizon, T-Mobile and Sprint. These four companies control 84.4 percent of the cellular service market, making it nearly impossible for smaller service companies to compete. Two of these companies, AT&T and Verizon, are on the list of the top 100 companies in the world in terms of sales. AT&T has annual sales of 123 billion dollars and Verizon has annual sales of 107 billion dollars. By these standards AT&T and Verizon dominate the cell phone service market in America.
Overseas in Europe and Asia there are more competitors. China Mobile has the most subscribers of any service company with 463 million (AT&T, the largest provider in the US, has 70 million subscribers). Other notable overseas corporations are Vodafone (UK) and Deutsche Telekom (GER), T Mobile’s parent corporation.
The other side of the cell phone industry is the companies that manufacture cell phones and cell phone accessories. These are the top ten mobile phone companies:
- Samsung Electronics Co., Ltd.
- Nokia Corporation
- LG Electronics, Inc.
- Motorola, Inc.
- Apple Inc.
- Sony Ericsson Mobile Communications AB
- Research In Motion Limited
- ZTE Corporation
- HTC Corporation
- Palm, Inc.
Nokia holds the biggest market share at 38.6 percent, then Samsung with 19.5 percent, next LG with 10 percent, while Motorola and Sony Ericsson each hold around 4.5 percent of the market.
These cell phone manufactures have exclusive contracts and subsidizing agreements with the major service carriers, bringing the two sides of the industry together.
For example, the iPhone made by Apple is only sold through AT&T. AT&T subsidizes the iPhone paying Apple over $300 per phone in order to sell the phones to customers at lower prices and then makes a killing by locking those customers into long-term service agreements.
This video covers how AT&T and Verizon are dominating the US customer base and how service companies make money off subsidizing phones.