Proof Wireless Carriers Would Rather Not Compete on Price

          For years, I have expressed an educated opinion that wireless carriers would rather not “devote sleepless afternoons competing.” While I may have reached the boundary line of snarkiness, which I try hard not to breach, the point stands: carriers can better enhance share prices, profit margins, and bonus likelihood if they implicitly agree not to sharpen their pencils too often. Consumers pay a higher price for service.

          I also have frequently stated that industry consolidation enhances the likelihood of a mutual non-compete pact.  Specifically, the acquisitions of Sprint and other wireless carriers have so concentrated the market that the triopoly of AT&T, Verizon, and TMoble now collectively share a 96% market share. See https://blog.telegeography.com/2025-mobile-market-summary.

          I predicted the TMobile’s acquisition of Sprint eventually would eliminate TMobile’s iconoclastic, market disrupter posture.  See, e.g., https://telefrieden.blogspot.com/2018_06_17_archive.html.  The Judge who approved the merger disagreed, confidently concluding that TMboble would never relinquish its “uncarrier” maverick character.  He anticipated a “company reinforced with a massive infusion of spectrum, capacity, capital, and other resources, and chomping to take on its new market peers and rivals in head-on competition.” See https://storage.courtlistener.com/recap/gov.uscourts.nysd.517350/gov.uscourts.nysd.517350.409.0.pdf; https://telefrieden.blogspot.com/2018_06_17_archive.html.

          I was not surprised to read that several industry analysts have consider TMobile as a go along, get along, no so innovative and aggressive competitor, having its uncarrier disposition.  See Monica Alleven, What happened to T-Mobile's ‘un-carrier’ edge?, Firece Network (May 6, 2025); https://www.fierce-network.com/wireless/what-happened-t-mobiles-un-carrier-edge.

          Only a coined operated, sponsored researcher can unconditionally assert that industry consolidation “enhances competition.” Mergers make it more likely that the remaining ventures engaged in what antitrust economists term conscious parallelism. Rather than compete on price, the wireless carriers offer roughly the same rates.

          Apparently, AT&T, TMobile, and Verizon have identical costs of doing business, so much so they become price takers.  Lacking any efficiency cost advantage, the carriers set prices based on what the other two offer.  The highest rates offered by one of the three carriers becomes an  cap.  The carriers’ rate fit snugly at or slightly below the umbrella cap.

          Less is More? No, less is less: less innovation, little price competition, and reduced consumer welfare.