US currently has four major mobile phone operators: AT&T, Verizon, T-Mobile USA and Sprint. Clearly, AT&T and Verizon have built up a huge lead over the other two competitors. And with Sprint leaking customers, consolidation in MVNOs (Virgin Mobile merging with Helio) and resellers switching operators, a la Qwest, it is anybody’s guess how long Sprint will survive as an independent company.
On the other hand, T-Mobile International certainly has a strong presence in Europe and is doing well there, thanks to its Duetche Telekom parent. However, in the US market, it is a different story. T-Mobile USA just passed 30 million customers in first quarter of this year. And this quarter, it has made an aggressive move to get additional revenue from its existing customer base by introducing the $9.99 home phone line. It remains to be seen how it affects it bottom line.
So, is the US market headed to be a duopoly with a distant 3rd operator? I certainly think so. It make take a few years to get there, but certainly expect this scenario to play out. I expect Sprint to be acquired by an international operator like SK Telecom or some other and it will focus its efforts on infrastructure and depend on the MVNOs and smaller players to provide the revenue. I don’t expect Sprint to be acquired by either AT&T or Verizon due to regulatory obstacles. A potential scenario could be that T-Mobile & Sprint merge. That could be interesting, however, the operate on two different platforms, GSM and CDMA respectively. That could pose some challenging integration issues. Another scenario that could happen should Sprint not be acquired, would be either Verizon or AT&T propping it up with some sort of investment, similar to Microsoft’s bailout of Apple. This could provide sufficient competition in the marketplace to keep the regulators and Congress pacified.
