It’s time for US mobile market players to mentally prepare for a different set of dynamics — for an “un-carrier” to be third-placed.
The economic rule of three is a strong undercurrent affecting any competitive landscape, whether looking at game consoles (PlayStation, Xbox, Wii), browsers (Chrome, Internet Explorer, Firefox) or the US car market (GM, Ford, Chrysler). In most mature markets, competitors grow and combine over time until three mainstream companies are left standing.
Sprint’s subscriber numbers would be much closer to those of Verizon and AT&T should the potential bid for T-Mobile USA be successful. Sprint and T-Mobile have a combined total of about 100 million subscribers in the US, compared with Verizon’s 122 million and AT&T’s 115 million. This would suggest a levelled three-way market, in which any competitor would have the resources to match the others, move for move. This will be used as a core argument by supporters of the deal.
However, combining the third- and fourth-largest American wireless carriers wouldn’t be a straightforward or painless process. The two have an assortment of spectrum, brands and stores, have historically used different air interface technologies and have rather different corporate personalities. T-Mobile’s Un-carrier strategy under CEO John Legere contrasts with the outwardly calm demeanour of Sprint under CEO Dan Hesse. However, both executives know the market is changing in ways greater than either could handle independently. Service providers across the US are offering quad-play services and preparing to enter adjacent markets, and Sprint will need to scale up to keep up.
The rule of three is a market observation, not a law of physics — there are no certainties, just trends. The market is evolving, and cellular access is just one part of a general service package. CCS Insight believes that Sprint and T-Mobile will shuffle pieces around and divest assets in a bid to convince regulators of the merits of the deal, and we’d be surprised if we didn’t see further consolidation of telecom providers in the US.
Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.
Essential Website Cookies
These cookies are strictly necessary to provide you with services available through our website and to use some of its features.
Because these cookies are strictly necessary to deliver the website, you cannot refuse them without impacting how our site functions. You can block or delete them by changing your browser settings and force blocking all cookies on this website.
Other external services
We also use different external services like Google Webfonts, Google Maps and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.