The U.S. mobile industry would be more competitive with one less carrier, Sprint’s CFO said on Thursday.
The problem now is that Sprint and T-Mobile US are so much smaller than the top two carriers, AT&T and Verizon Wireless, Joe Euteneuer said in an onstage interview at a Goldman Sachs conference in New York. Based on the experience of other industries, closer parity is better, he said.
“When you get down to three comparable-sized players, you get much more effective competition,” Euteneuer said.
Sprint has approximately 55 million subscribers and T-Mobile about 43 million, while Verizon Wireless and AT&T both are around 100 million, though they count customers differently. T-Mobile US CFO Braxton Carter reportedly said Wednesday that a merger between his company and Sprint would be the logical next step in the industry’s consolidation. Some industry analysts also believe the U.S. will eventually go to three competitors, as other affluent countries have.
Though more consolidation might be good for the country, that doesn’t mean it’ll happen, Euteneuer acknowledged. Whether the U.S. should have three or four big mobile carriers is a hotly debated topic, and both the U.S. Department of Justice and the Federal Communications Commission have some control over whether another big deal could take place. Regulators nixed AT&T’s attempt to buy T-Mobile in 2011.
MetroPCS, Leap Wireless, and some smaller players have recently been snapped up by big carriers, and Sprint was acquired by SoftBank earlier this year, but the top four operators have stayed the same.
Also at the conference, Euteneuer said Sprint’s combination with SoftBank, which is a major carrier in Japan, finally gives it the kind of scale that Verizon and AT&T have long enjoyed when negotiating with device makers. “I do believe that there is a benefit there,” he said.
Sprint's network build out
Sprint is currently focused on building out its network, which will use several different cellular frequency bands as well as Wi-Fi for better coverage and capacity than it offers today, Euteneuer said.
The company is still building out LTE on its 1.9GHz band and expects to reach 200 million people on that system by the end of the year. It’s using the 800MHz band for voice service now and plans to start deploying LTE on those frequencies at the beginning of next year. By the end of the year, LTE will be available on more than 5,000 cells that Sprint acquired with Clearwire, which use 2.5GHz spectrum. Finally, early next year Sprint will start talking about its plans for LTE on its own 2.5GHz frequencies, Euteneuer said.
By the end of this year, the company will start offering handsets that can take advantage of all those networks with radios for the 800MHz, 1.9GHz, and 2.5GHz bands, he said.