The Disproportionate Focus on ‘Wireless Competition’ – Tech.pinions

The road to T-Mobile’s acquisition of Sprint being approved just became a little bumpier this week, with news that additional states have joined the effort to block the deal. This has been a roller-coaster, overly politicized process that’s now dragged on for more than a year, with no clear timeframe for a resolution in sight. In a recent column for Fierce Wireless, I reiterated the three ‘big picture’ reasons why the deal should be approved: better for 5G, better for broadband competition, and better for competition in the enterprise segment.

In this column, I’d like to briefly explore another angle…which is a continued curiosity about why there is so much focus on the level of competition in wireless, given that so many other industries in communications, digital media, and the internet are far less competitive than even a three player (plus MVNO/reseller) wireless market would be.

Closest to home is broadband. This market remains a monopoly in half the county and a duopoly at best, with high prices and middling average speeds compared to other ‘peer’ countries. Now, let’s look at other sectors of the telecom space. In telecom equipment, there are three suppliers who control more than 90% of the market. And with Huawei largely shut out of the U.S. market (and a growing number of other markets), there are two players supplying the essential equipment for 4G and 5G networks. Other telecom ‘sectors’ with three or fewer players owning 90% of the market include: enterprise Wi-Fi, OSS & BSS, and towers, to name a few. In smartphones, it’s largely a two player world in much of the world, with Apple and Samsung owning some 90% of the industry profits. And on smartphone OSs, it’s an iOS and Android world (with Android controlling 70%+ share in many countries).

How about some related Internet and digital media sectors? With all the consolidation in the media space, we now have Disney owning 40% of the global box office, with Fox folded in. Digital Advertising? Nearly 60% is Google and Facebook, with a long tail of pretty large companies (Amazon, Microsoft, Verizon) fighting for scraps. Satellite TV and Satellite Radio are both two player markets. Some 70% of the streaming music market is owned by Spotify, Apple, and Amazon. Public cloud? Amazon and Microsoft control 70% of that market, and the share of ‘Other’ has dropped from 52% to 16% between 2016 and 2019.  And lest you think that the Internet Travel business is competitive, know that Booking Holdings owns Booking.com, Kayak, and Priceline, while Expedia Group owns Expedia.com, Hotwire, Hotels.com, Trivago, and Travelocity. Online ticketing: Live Nation/Ticketmaster has 85%+ share of the market.

Some other examples in major sectors of the digital universe:

I’m sure there are additional examples, but the above probably makes the point.

Getting back to wireless, there are three additional arguments that favor the move from four competitors to three:

I’ve argued for a year that those opposing the T-Mobile deal have been looking at it through the wrong lens. Then, add the ‘proportionality’ argument above, which shows that other industry sectors are far more less competitive than the wireless market. All this makes me puzzled as to why there’s been this outsized, expensive, and delay-inducing opposition to opposition to a deal that would make the U.S. wireless market structure look like that of most other developed countries.

Source: Techpinions.com

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