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.
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