A combination of factors is driving inevitable consolidation in the wireless carrier ecosystem including:
- Saturation: The US market has reached high penetration causing most new growth to come from cannibalization
- Price pressure on voice: The likes of Google Voice, Skype for Mobile, and pressure for unrestricted VoIP is a problem
- Smaller players simply will not be able to compete: Tier-two carriers such as Metro PCS, Leap Wireless and US Cellular are under pressure
AT&T and Verizon are clearly the market leaders constantly juggling for 1st place with Sprint a struggling third.
The future will be one in which there is essentially no more tier two players anymore. There will only be AT&T, Verizon, and Sprint.
The following companies will be acquired:
- Metro PCS
- Leap Wireless
- T-Mobile USA
- US Cellular
Sprint will have to position itself as the lower cost carrier and also the preferred carrier for \”cut-the-cord\” users.
So far, Verizon and AT&T has not done a very good job at converged services or cut the cord.
A significant amount of the new growth for wireless will come from the migration from wireline to wireless and converged services.
Successful carriers will be those that leverage this trend and also recognize that both voice and data are to become commodities.
Successful carriers will therefore push for convergence and offer value added services that offset the inevitable price reductions on core services.
Don’t be suprised to see consolidation accelerate within the next 6-12 months.
Contact Mind Commerce