About the time PCS licenses were first up for grabs, industry prognosticators predicted that four or five mega-carriers would one day rule the U.S. wireless industry.
Are we there yet?
As Bell Atlantic admits it is talking with Vodafone AirTouch plc about a link-up between their wireless interests (nothing official has taken place as this page goes to press), I can easily count a handful of mega-carriers: Vodafone AirTouch-Bell Atlantic-GTE, SBC-Ameritech-PacTel, AT&T-TCI-MediaOne, Sprint, and MCI WorldCom, despite its lack of a wireless play.
For me, the intriguing part of these mammoth consolidations has always been how they affect the next round of consolidation. Here is how I see it:
1. MCI WorldCom is going to have to pay top dollar for Nextel if it wants to stay a mega-carrier. Nextel is a simple buy: Its technology is proven and consistent throughout the company (no messy decisions about integrating TDMA, GSM and CDMA, etc.); the company’s ARPU is in the $70-range and probably will stay higher longer than traditional wireless operators; and despite what you think about the company’s attempt to take over NextWave’s PCS licenses, Nextel obviously earns a high grade for planning ahead. The longer MCI WorldCom holds out, the more expensive Nextel will become.
2. Where do the GSM carriers fit into this puzzle?
3. BellSouth will not be able to hang onto its regional strategy much longer. The issue is how all of this will play out. Will SBC pick up BellSouth because BellSouth fills nicely a niche in its nationwide strategy? Or is SBC looking to go up the consolidation ladder, so to speak, perhaps linking up with a Deutsche Telekom or other international carrier?
4. And what do Deutsche Telekom’s loud musings about wanting a U.S. wireless play mean to Sprint and AT&T? AT&T and British Telecom have an international relationship. Could that cross waters into U.S. territory? Will the Global One alliance part ways to make room for a Deutsche Telekom/Sprint combination, or once Global One is dissolved, will Deutsche Telekom decide one troubled relationship was enough?
Or am I not thinking big enough?
