AT&T, Verizon pick apart the remains of Pioneer

Like vultures circling a kill, AT&T and Verizon have been snapping up the assets of Pioneer Telephone Cooperative, which shut down its wireless network earlier this year.

The latest: Verizon asked for FCC permission to acquire some of Pioneer's PCS, AWS-1 and AWS-3 spectrum licenses. That move comes months after AT&T sought permission to purchase some of the Oklahoma operator's 700MHz and PCS spectrum licenses.

"Pioneer exited the retail mobile wireless business by transitioning its mobile wireless customers to other wireless providers from July 2023 through the beginning of October 2023, and no longer has any retail mobile wireless customers of its own," Verizon wrote to the FCC of its purchase of Pioneer's spectrum. "Pioneer, however, continues to operate an LTE network in rural areas that supports Verizon Wireless customers through CNP's [Pioneer's] participation in Verizon Wireless's LTE in Rural America (LRA) program. The proposed [spectrum] assignment will allow Pioneer to transition its LRA mobile wireless operations to Verizon Wireless, and will allow Verizon Wireless to expand its coverage into an area where it currently has no network."

Verizon also said it would acquire some of Pioneer's network equipment.

According to Brian Goemmer, of spectrum-tracking company Spektrum Metrics, T-Mobile will probably get into the game at some point. "From my count, it appears that Pioneer still retains their 600MHz spectrum licenses, their 700MHz A block license, and the C-band licenses," he told Light Reading. Goemmer was the first to spot Verizon's newest filing. "The 600MHz and 700MHz A block licenses are both logical fits for T-Mobile."

The developments indicate the nation's big wireless network operators are content to let some of the market's smallest players quietly exit the business and shutter their networks. That way, they can snap up such companies' spectrum licenses in rural areas, in many cases without the cost and complexity of buying the companies' customers and operations.

Another exit

"For 70 years, Pioneer has been proudly serving our customers and businesses with the best communication tools to keep them connected with the people, communities and information that matters most," the company said earlier this year. "We have made the business decision to discontinue our cellular operations."

A Pioneer official told the Southwest Ledger the company exited the wireless industry because it's difficult for smaller providers to be profitable.

Pioneer isn't the only company withdrawing from wireless network operations. For example, IV Cellular plans to transition from a wireless network operator to an AT&T reseller by the end of this year. The company's CEO told Light Reading that a variety of factors pushed the small Illinois company to shut down its wireless network after roughly 30 years of operation.

"Many of the challenges IV Cellular faced were not unlike the challenges faced by most small, rural carriers, including increased competition, accelerating technology upgrade cycles, and a shrinking vendor ecosystem," wrote Jonathan Foxman in response to questions from Light Reading. Foxman is the CEO of MTPCS, which operates under the Cellular One and Illinois Valley Cellular (IV Cellular) brands.

A hard knock life

As T-Mobile, AT&T and Verizon all expand their networks into more rural areas, they're putting additional pressure on the small wireless network operators that were previously the only option in such locations.

Partly as a result, West Central Wireless in Texas, Missouri's Chariton Valley Communications Corporation (CVCC), Montana's Triangle Mobile and Bluegrass Cellular in Kentucky are among the smaller wireless network operators in the US that have exited the industry.

Other factors accelerating the trend include a tightening competitive environment, encroaching competition from big network operators, 5G upgrade costs and an uncertain economic outlook.

"We're going to keep going until it doesn't make sense anymore," Mike Laskowsky, the network manager of United Wireless, told Light Reading recently. The company operates a mobile and fixed wireless network across 120 cell towers in parts of Southwest Kansas. "We're going to stay in mobile as long as we can."

A final factor affecting some companies in the space: the FCC's "rip and replace" program. The effort involves tearing out equipment from Chinese suppliers like ZTE and Huawei – equipment considered a security risk by US officials – and replacing it with "trusted" equipment.

But that program remains underfunded, and participants continue to complain of delays and other difficulties.