Over the history of the wireless industry in the U.S., the question has repeatedly been, “How many national carriers can there be?” At one point it was six, then there was five, now there is four…but what about three?
In a report released today, telecom consultant Chetan Sharma tallied up the financial statements of carriers from around the world in the second quarter to get a comprehensive look at what’s going on.
His report found that AT&T (NYSE: T) and Verizon continue to kill it. Together, the top two carriers account for 70 percent of the market data services revenues and 62 percent of the subscription base. Sure, Sprint (NYSE: S) celebrated its first quarter in three years that it added overall subscribers and T-Mobile USA did better on postpaid net adds, but its overall additions declined.
Can the market support four? “Generally, the answer is no,” he writes.
The problem is that for the first time in history, there’s no clear tie-ups. Sure, there’s been discussions about Sprint and T-Mobile merging, maybe even with Clearwire (NSDQ: CLWR) thrown into the mix somehow, but no two clear combinations make sense that regulators likely wouldn’t object to. Sharma offers his opinion: “These are different times and there are a number of permutations and combinations that are possible.”
The competitiveness doesn’t end with the carriers. Handset makers, too, are feeling the pressure in churning out the latest and greatest devices from phones to tablets. Sharma comments: “Players are having to re-evaluate their businesses and long-term strategies…There are several players whose future is at stake (to put it mildly). The competition has grown fierce and companies are finding it hard to take ideas from R&D to products in market in a short amount of time.”