My colleague Kevin Fitchard wrote an outstanding piece today examining how the recent flurry of consolidation among carriers is impacting the industry nationwide. While a small army of mid-sized, regional service providers thrived just a few years ago, nearly all those carriers — from Alltel to MetroPCS to Leap Wireless (if regulators approve that deal) — have been swallowed up by bigger carriers looking to add subscribers and, more importantly, spectrum. As Fitchard writes:
“Make of it what you will, but this is the mobile industry we’re getting stuck with: A mobile landscape divided between urban and rural with nationwide megacarriers dominating the cities and tiny regional providers surviving only in the towns and communities in between. There might not be room for anything else in the middle.”
Indeed, it’s very difficult to see how a mid-sized carrier can compete with the four existing behemoths, especially given the increasing scarcity of quality spectrum. But that consolidation may open the door for an innovative new operator to change the game over the next few years: A traditional, fixed-line service provider without a mobile play could leverage residential Wi-Fi coupled with roaming deals to offer wireless voice and data at rock-bottom prices, just as Iliad’s Free Mobile is doing in France. Dish Network might actually decide to put its spectrum to use by building a network from the ground up. Or the Federal Communications Commission could implement rules in its upcoming spectrum auction to favor smaller operators and foster competition. None of those potential moves would breathe new life into the dying regional carrier model, of course, but they could provide some attractive alternatives to the increasingly dominant tier-ones.