Have you noticed how much better things are for customers of the major wireless carriers these days? Not many years ago, consumers were locked into two-year contracts, monthly charges kept going up, and there weren’t a lot of new services on offer. That’s changed, and a good deal of the credit belongs to T-Mobile.
Its “uncarrier” campaign sounded the death knoll for lock-in contracts, its aggressive pricing touched off a spate of competition in a once-stagnant market, and its willingness to launch innovative services like “Binge On” forced its larger rivals to follow suit.
That all may change – and not for the better.
The Japanese conglomerate that owns Sprint wants to buy T-Mobile, and it has been buttering up the White House in hopes of stopping anti-trust action before it starts. I have my criticisms of T-Mobile and its over-the-top CEO, John Legere, but the very real chance that it will disappear under a wave of merger mania is terrible news for consumers.
Four major carriers are the bare minimum to ensure serious competition. Cutting that down to three by eliminating the most aggressive competitor will bring back the bad old days of carrier arrogance.
This threat to competition comes at the hands of Masayoshi Son, chairman of the SoftBank Group, which owns Sprint, the smallest, weakest and least profitable major U.S. carrier. Indeed, Sprint hasn’t turned a profit in about a decade and despite some improvements, its network is consistently rated well below those of Verizon, AT&T and T-Mobile.
“Basically, anything is possible, but I think the number one favorite, the quickest route to synergy, is the option that we pursued from the start — T-Mobile,” Son told reporters in Tokyo Wednesday.
What Son is referring to is an earlier attempt to buy Sprint that was abandoned because officials at the U.S. Federal Communications Commission and Justice Department signaled they would oppose it, but that was under the Obama administration. Trump appears much less inclined to defend consumers from corporate consolidation, and Son, one of the world’s richest men, has dangled a major, job-creating investment in the U.S. in front of the business-oriented White House.
Although the combined carriers would reap some efficiencies and benefits of scale, such as more capital to invest in the business, the inevitable result of the merger is less competition and a dilution of T-Mobile’s aggressive DNA.
Meanwhile, another less well-publicized corporate maneuver is setting off my consumer danger detector. Comcast and Charter, two giant cable TV providers, are both gearing up to sell wireless service. While I can’t imagine ever wanting to trust my cellular communications to Comcast, any move that promotes competition is welcome.
[Related: –>The specter of Comcast as a wireless carrier is more than a little frightening]
Comcast says Xfinity Mobile will debut in a few weeks and Charter plans to start selling cell service next year. Neither company has a wireless network or plans to build one, so both will resell service over Verizon’s network.
Initially, I suspect, target customers will likely be people who already subscribe to their cable services. I can certainly picture Comcast offering a “triple play” of cable TV, Internet and wireless services.
To protect themselves, Comcast and Charter have agreed to stay out of each other’s territory when they promote wireless service and pledged not to buy a wireless carrier without the other’s permission.
Entering the wireless market is their own business, but making agreements that are clearly and unsubtly meant to limit competition is the public’s business.
None of this is good news for consumers. I’m sure that if the Sprint/T-Mobile merger moves forward, there will be campaigns to convince the Department of Justice and FCC to stop it. So pay attention, and get ready to send those emails.