Home Will AT&T Kill the Golden Goose of Mobile Industry Competition?

Will AT&T Kill the Golden Goose of Mobile Industry Competition?

Is innovation at risk in what could be the most innovative sector in the history of the United States?  Fresh off the news that AT&T seeks to acquire T-Mobile for $39 billion, that was the question at the center of conversation this morning as the CEOs of the 3 largest mobile companies in the United States took the stage with MSNBC’s Jim Cramer to kick off the CTIA conference in Orlando, Florida.

It was a moment of high drama and the players didn’t dissapoint.  When asked point blank about the consequences for innovation of the deal AT&T’s Ralph de la Vega focused on the positive and Verizon’s Dan Mead yawned at the supposed threat.  Sprint CEO, underdog and the Chairman of CTIA itself Dan Hesse, however, was quite explicit in sounding the alarm.

ReadWriteWeb’s CTIA disclosure is sponsored by Sprint and it’s a good thing, too.  The opening keynote panel at the conference had a clear crowd favorite and it wasn’t the head of either of the two dominant carriers speaking.  Sprint’s Hesse got the loudest cheers of any speaker of the morning with his clear statements critical of the growing market dominance of his fellow panelists and what it meant for consumers and technology.

Panel moderator Jim Cramer started out asking simply, what are the consequences to innovation of the AT&T deal for T-Mobile? The New York Times said there was little for consumers to cheer about concerning the deal.  Did the panelists agree?

AT&T’s Ralph de la Vega answered first.  He disagreed, of course, and said that the deal would benefit consumers because it resolves spectrum issues in major cities. “When you combine networks,” he said, “your coverage becomes denser and you have more capacity.” He also said that as a result of the deal, AT&T would focus on rolling out next generation networks to rural America.  

Throughout the panel, de la Vega’s responses had a tone of humility.  That’s probably a good affect to take on, given the stakes of regulatory consideration of the T-Mobile deal.

What does Verizon think of the deal?

CEO Dan Mead appeared unmoved.  “We’ve built a foundation of great spectrum through many may acquisitions similar to what’s being discussed here,” he said.  “We feel very good about our spectrum position.”  When asked if Verizon had considered acquiring T-Mobile itself, Mead said “we didn’t think there was a need.”

Mead didn’t offer much comment on innovation in particular, he appeared much more concerned about the company’s strong marketshare and ability to service its customer’s basic needs.

“The underlying issue is a fundamentally sound spectrum policy to foster innovation,” he offered. “We have a tremendous amount of competition [already].”

The Sprint reply was the most entertaining.

“Are you concerned that consolidation could stifle innovation?” asked moderator Cramer.

“My opinion doesn’t matter,” said Sprint CEO and CTIA chairman Dan Hesse, “it’s the FCC and the DOJ’s that matter. But yes. If that transaction is allowed to proceed, 79% of marketshare would be in the top 2 companies. I am concerned it would stifle innovation.”

With that the crowd at the event burst into cheers.  It was clear that people at this industry event are concerned about the growing centralization of power as well.

Hesse gave AT&T credit for opening up the huge market for mobile apps like no one else had been able to do before, but he also said he really hopes that the Microsoft and Nokia partnership goes well.  “If that partnership goes well, it gives consumers more choice,” he said. “I think it’s good for our industry to have a strong 4th choice.”

That’s an appealing and intuitive position to take.  It’s also a logical position for someone who is on the outside of that 79% marketshare held by the 2 big players.

In a fast-mobilizing world, rich with innovation possibilities throughout a complex value chain, what do you think is best for innovation?  Competition among a larger number of mobile carriers or the superior service and platform that the market leaders say comes from scale and density of coverage?

Disclosure: The topic of this post was chosen independently of Sprint’s sponsorship of our coverage at CTIA. Because of the scope of the event, our coverage of CTIA will at times undoubtably mention other vendors and companies including Sprint and their competitors.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.