T-Mobile, Sprint, and Dish Network Team Up Against Verizon and AT&T
Sprint and T-Mobile might not be merging, but the two companies are still putting up a united front against Verizon and AT&T alongside Dish Network by urging the FCC to reserve some spectrum for the little guys.
In a letter sent to FCC Chairman Tom Wheeler Tuesday where Verizon and AT&T are ominously referred to as the "Big Two," T-Mobile Chief Technology Officer Neville Ray stressed the imbalance in the U.S. wireless industry.
Ray implored the FCC to reserve 40 megahertz of spectrum for lower-budget competitive carriers during the upcoming 2016 600MHz spectrum auction, citing it as a last chance for "would-be competitors to challenge the dominant incumbents" and expand consumer choice in the market.
"Without a reserve of at least 40 megahertz, AT&T and Verizon will be able to increase their low- band spectrum holdings, entrench their dominant positions in the wireless marketplace, and choke off any threat of competition in the future," writes Ray. "Verizon and AT&T have deployed networks in many areas of the country that would not be economically feasible without low-band spectrum's exceptional propagation characteristics."
Ray also highlighted the fact that Verizon and AT&T control 72 percent of industry revenues and 94 percent of the free cash flow. Combined, Verizon and AT&T won a whopping $28.6 billion worth of licenses during a recent AWS-3 spectrum auction combined to $2.7 billion for the rest of the industry, T-Mobile included.
Each one of the Big Two contains more subscribers than Sprint and T-Mobile (the next two largest national U.S. carriers), but in order for the smaller ones to grow, T-Mobile states (as has Sprint through other outlets) it needs the necessary low-band spectrum to expand and provide better coverage.
"Low-band spectrum allows us to deploy far fewer costly radio base stations than mid- or high-band deployments while still offering comparable coverage and service. Low-band spectrum also opens many new options for base station locations," said Ray.
"However, the major shortcoming of our deployed 700 MHz spectrum is that available supply is limited."
T-Mobile isn't the only company worried about the Big Two putting a stranglehold on the U.S. wireless industry. Several major telecomm players, including Sprint and Dish Network, recently launched a new initiative called Save Wireless Choice aimed at getting citizens to take action and send in letters to the Congress and FCC against further domination by Verizon and AT&T.
Sprint and T-Mobile also nearly merged last year, with both companies citing the need for scale to compete effectively against Verizon and AT&T as a major reason. The merger was eventually shelved due to doubts about reducing the number of big carriers in the United States from four to three.
For more stories like this, follow us on Twitter!