Phil Goldstein

AT&T CFO John Stephens said it would "surprising" for federal regulators to approve a deal for Sprint to merge with T-Mobile US so soon after they quashed AT&T's bid to buy T-Mobile.

While he said he did not have any specific view on a transaction -- because there is no formal deal between Sprint and T-Mobile -- he noted that for several years AT&T has pushed for more industry consolidation because of increasing data demands, capital requirements to upgrade networks, and a shortage of available spectrum. He noted that the government obviously disagreed, thwarting AT&T's proposed $39 billion takeover of T-Mobile in 2011.

"It would be interesting to see if the government varies from that," Stephens said. "I don't think they will." He said the industry would have to see what happens, but that it "would be surprising today if they changed or reversed that opinion."

Verizon Wireless could potentially tap new business models thanks to LTE Multicast technology, though it will take a few years for customers to take advantage of it on a widespread basis, according to a top Verizon executive.

Verizon Communications CFO Fran Shammo said the technology could open up new possibilities for Verizon that don't exist today. Those include the ability to sell content rights in terms of hour-long time slots, pay-per-view events or sporting events like the World Cup. There exists "a lot of ability with Multicast to really generate additional revenue for the industry," he said, but added that "the ecosystem will have to develop here." LTE Multicast, sometimes called LTE Broadcast, uses evolved Multimedia Broadcast Multicast Service (eMBMS). Essentially, the technology allows the same content to be sent to a large number of subscribers at the same time, resulting in a more efficient use of network resources than each user requesting the same content and then having the content unicast to each user. The Verizon CFO also touched on several other hot-button issues at the conference. Notably, he said that Verizon does not want to move away from the traditional US model of offering device subsidies in exchange for customers signing two-year contracts.

Edge is "another option for our customers" that Verizon does not force, Shammo said. "We believe that the subsidy model is an extremely good one," he said. "It's done wonders for us in this industry. I think that to abandon it is a mistake."

[March 10]

AT&T CEO Randall Stephenson said that the model that has prevailed in the US wireless industry for years of customers getting subsidized devices in exchange for signing two-year contracts is radically shifting.

Stephenson said that competition ramped dramatically in 2013. It was sparked mainly by T-Mobile US, which shifted away from contracts and device subsidies and has since kept up the pressure, offering to pay the early termination fees of customers who switch to T-Mobile and trade in their devices. Other carriers have embraced device financing models in the wake of T-Mobile's actions.

Stephenson said the average customer now "has a lot more transparency" and can more clearly understand the value proposition of what carriers are offering. They can see the cost of devices more clearly and then force carriers to compete more directly on network quality and pricing. Customers are opting to choose lower monthly pricing in exchange for paying for the device up front or in installments, Stephenson said. "The customers are overwhelmingly choosing that equation," he said.