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.
