Deutsche Telekom, the parent company of T-Mobile USA, yesterday squashed speculation that the German carrier would buy Sprint, saying the U.S. market has consolidated enough. Such a comment, made by CFO Timotheus Hoettges, raises questions as to just how competitive the U.S. mobile market is, especially as consumer groups argue we’ve reached a point at which the four big carriers move in lockstep when it comes to raising prices, offering services and delivering new technology.
To be sure, Hoettges didn’t say outright that the U.S. market was a stagnant oligopoly, but his comparison to the European cell market sure made it sound that way. His assessment and comparison may come as a blow to folks on this side of the pond who argue that not only is the country’s cellular market competitive, it’s even robust enough to compete with wireline voice and data.
Bloomberg quoted Hoettges as saying:
“There are four national players in the U.S. market for 300 million households, while in Europe, where we have 350 million households, there are 50-70 operators,” Hoettges said, after a conference in Frankfurt today. “We believe in our chances of being the challenger.”
Warming to the challenger position, T-Mobile is attempting to buy UK carrier Orange in a deal that’s facing regulatory scrutiny abroad. It would leave the UK — a much smaller country than the U.S. — with four primary wireless carriers. Sounds familiar.
“There are four national players in the U.S. …while in Europe there are 50-70 operators”
*omg*
Can you imagine that kind of competitive, free market here?!?!? A utopia of choice, low price, utility for us long suffering Consumers.
I’ll just assume it’s the entrenched, rampant, corruption of telco lobbyists that prevent us having what Europe has.
http://www.opensecrets.org/industries/indus.php?ind=B08
are those 50+ operators available Europe-wide or are they each limited to specific countries or local regions?
Who cares , if anything the parent should have worked hard on the kids home work.
T Mobile coverage is limited to big cities. Not that SPRINT is great , but its much better than T Mo.
The whole idea of DT buying SPRINT is similar to SPRINT buying Nextel.
Nuff said.
Some of the analysts don’t have a good head on their shoulders.They started this rumor.
Hello Stacy,
actually underperforming TMoUK is not buying Orange UK: both companies have plans to pool their operations into a JV.
To date TMoUK parent company is leaning towards selling its JV stake and cashing out when JV’s performance improves.
Tariq