My colleague Kevin Fitchard reports “we could be witnessing a competitive renaissance” in mobile as both Sprint and T-Mobile may be well-positioned to take back some market share from Verizon Wireless and Sprint. Fitchard takes a hard look at a new research note from UBS Telecom analyst John Hodulik that offers three primary reasons the lesser tier-ones are ready to strike back: 1) Sprint and T-Mo are closing the LTE gap with their bigger competitors; 2) Prepaid growth is picking up again as postpaid growth stalls; and 3) Overall subscriber growth has slowed almost to a standstill, which should benefit the smaller carriers who can differentiate with lower price plans and enhanced services.
Hodulik’s analysis may be a bit premature, as Fitchard points out, but if the UBS analyst is right it could have a big impact on the spectrum auction the FCC hopes to hold next year. The FCC is considering implementing rules that would give smaller carriers some advantages in the auction in the hopes the move would increase competition among carriers. Verizon and AT&T are fighting tooth and nail against such rules, naturally, claiming they would only decrease the amount of money the auction would generate. If Sprint and T-Mobile gain some real ground against the nation’s two largest carriers before the FCC makes a decision, the proposed new rules would be far less likely to gain approval.