Wireless Consolidation: How Did We Get Here?


MetroPCS (s pcs) recently met with the Federal Communications Commission about wireless competition, presumably in response to AT&T’s (s T) proposal to buy T-Mobile USA for $39 billion. Already, industry groups, average consumers and Sprint (s s) have come out against the proposed merger, and MetroPCS also offered up this nice slide showing how the industry has been consolidating for the last decade.

It also shows the huge disparity in market cap between the top two carriers and the remaining ones, namely Sprint and MetroPCS. If we want to be fair, I would have also included Leap Wireless (s leap) which operates the Cricket brand of prepaid service, and is the most direct competitor to MetroPCS. Leap’s market cap on the day this chart was compiled was $1.29 billion. That’s still a long way off from AT&T’s $180 billion.

Sure, the industry as we know it today was built by consolidation, but as more and more people rely on mobile broadband, the stakes are much higher. Do we really want what is effectively a duopoly in wireless to mirror the duopoly we already have in wireline?



If I was the FCC, given the iPhone/iPad effect on profitability, I would hold up the AT&T/T-Mobile merger a bit to see if/when all US carriers get supported by Apple. Just maybe, the upcoming “world-band” Qualcomm Gobi chip will be in iPhone5 and iPad3.

If so, this could boost competition immediately for the lesser carriers, me thinks.

Interesting regulatory balancing of mobile carriers going in China, btw. Worth a compare/contrast article, Stacey, Om. ;)

Matt Hunt

I’m so tired of hearing this. It’s not AT&T’s fault that Apple supported GSM first. It’s not AT&T’s fault that Apple tried to go to Verizon and they rebuffed them. Why punish AT&T for Apple’s contract negotation failures and equipment compatibility?

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