Technology

AT&T, Verizon and GSMA being investigated over eSIM, NYT reports

AT&T, Verizon and GSMA being investigated over eSIM, NYT reports

This would make it impossible for customers to switch carriers and runs counter to the objective of eSIM.

GSMA said in a statement that the move to a global standard for eSIM technology is "on hold pending the completion of an investigation by the United States Department of Justice". An embedded SIM, or eSIM, is a standardized SIM chip that allows users to switch between carriers without changing a SIM card. eSIMs are commonly found in smartwatches but have recently been added to a few smartphones such as the Google Pixel 2.

The Justice Department is investigating an alleged case of collusion, but this has nothing to do with President Donald J. Trump and Russian Federation. In the US, Verizon and AT&T control 70% of all wireless subscriptions.

A Verizon spokesperson called the investigation "much ado about nothing", brushing off the matter as little more than a "difference of opinion" regarding eSIM standards. The reason? To prevent customers from leaving their services and switching to another carrier, in which eSIM tech makes it easier for them to do so.

After the formal complaints against AT&T and Verizon were filed, several device makers and other wireless companies voiced similar concerns to the agency about the carriers' actions around eSIM, four people familiar with the investigation said. As we have from the outset, we will continue to work with Federal officials and others in the industry as we strive to find a mutually acceptable solution.

The investigation comes as the Justice Department is suing AT&T to block its $85 billion merger with Time Warner.

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He previously warned of the potential for "cartel-like behavior" by competitors that got together with standards-setting organizations.

Shares of AT&T and Verizon dipped after the initial Times report, with AT&T closing down 0.4 per cent at US$34.67, and Verizon ending off 1.1 per cent, at US$47.90.

FBN's Connell McShane discusses the court battle between AT&T-Time Warner and the Department of Justice.

The technology is now available on some devices, including Apple Watch Series 3, Samsung Gear S2 smartwatch and Microsoft's Surface Pro LTE tablet.

Apple and Samsung have both been pushing the telecom industry to adopt eSIM technology.