And Then There Were...Four

The paradigm of four major wireless operators in the U.S. will continue. The news that Sprint is ending its pursuit of T-Mobile USA, and ousting CEO Dan Hesse, suggests that U.S. regulators want to maintain the four-way competition among the national carriers rather than having only three.

The Sprint-T-Mobile merger reportedly faced stiff opposition in Washington, D.C. Only last week, the Federal Communications Commission said it would propose rules blocking the two companies from bidding together in a key upcoming spectrum auction.

The government’s stand is consistent with its efforts to block AT&T’s proposed $39 billion acquisition of T-Mobile in 2011, which would have effectively created a duopoly in the U.S. wireless market. There was more than a trace of irony in Sprint seeking to buy T-Mobile, given that the company was one of the most vehement opponents of the AT&T-T-Mobile merger.



“The most important decision that has been made in the five years I’ve been here was the decision to fight the acquisition of T-Mobile by AT&T,” Hesse told GigaOm in a 2012 interview. It turned out that federal regulators were no more amenable to the two smallest of the four major carriers merging than AT&T with T-Mobile.

Combining the third- and fourth-largest operators would still leave consumers with fewer choices, and less competition and innovation. Despite being the smallest of the four, T-Mobile -- the self-described “Uncarrier” -- has made gains against its larger rivals. The Wall Street Journal points out that T-Mobile has added 4 million postpaid subscribers in the last five quarters and attracted other suitors like French telecom company Iliad SA.

With the dismissal of Hesse, Softbank Corp.-owned Sprint may also adopt some of the more aggressive marketing approach T-Mobile has become known for under CEO John Legere. Softbank CEO Masayoshi Son’s “brash personality” was said to clash with Hesse and other Sprint executives,” according to the Journal report. Installed in Hesse’s place has been Sprint board member Marcelo Claure, formerly CEO of wireless distribution service BrightStar. 

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