US telcos pave way for more mergers


Coverage Type: reporting
Location:
USA, United States

Blame the iPhone. Since the debut of Apple’s smartphone in 2007, wireless data consumption in the US has mushroomed. Consumers now expect rapid access to email and the internet and video streamed to their handset cheaply and swiftly. For a few years the five big US wireless carriers were able to maintain the status quo. But as increasing demand for spectrum shows no sign of letting up, the industry has entered into a tumultuous round of consolidation.

There are more than 320 million mobile subscribers in the US and four major US mobile network operators -- Verizon Wireless, AT&T Mobility, Sprint and Deutsche Telekom’s T-Mobile USA unit. Smaller providers like MetroPCS, and wireless internet operator Clearwire, are also in the mix. Each is now pursuing deals that would strengthen it at home, and in some cases, abroad. Although Verizon and AT&T, the two largest US carriers, are constrained by regulators in their ability to expand through acquisitions, each is looking at other options. All these deals may just be precursors to a merger of the third and fourth largest players. Many in the industry believe that neither Sprint nor T-Mobile will be able to independently compete with Verizon and AT&T, and will be pressured to merge in the coming years.

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