It appears American wireless carriers are going to be facing business tension around the world given the National Security Agency spying activities. The first major consequence is hitting Verizon Communications in Germany as the country is not renewing a contract due to the NSA surveillance revelations.
It also follows tension between Berlin and Washington over alleged spying upon of top European officials, including German Chancellor Angela Merkel, by the United States. The fallout is tied to whistleblower Edward Snowden's revelations of covert espionage of average citizens by the NSA and telecom operators.
"The federal government wants to win back more technological sovereignty and therefore prefers to work with German companies," Tobias Plate, an interior ministry spokesman, said at a press conference in Berlin.
Verizon's contract will come to an end next year and although Plate refused to confirm whether the German government had evidence the telecom provider had delivered information to the NSA, it has been well-documented the role of American wireless companies, including AT&T and Verizon, in handing over records and personal information to the NSA.
It is the first major move by a European country against American companies in the wake of the NSA surveillance and could pose a market threat for Verizon and AT&T, both of which have spent billions in moving outside American borders.
There are several American analysts criticizing the German decision. Roger Entner, lead analyst at Recon Analytics in Dedham, Mass., says "Verizon is the victim here -- they tend to be faster, more flexible and cheaper than local providers."
He added that "now security is the trump card in the deck and that's why Deutsche Telekom wins."