Sprint’s Buy of T-Mobile Would Not Trouble Small Carrier CEOs
Competitive Carriers Association CEOs said they are not overly concerned about Sprint’s buying T-Mobile. On Thursday, Sprint Chairman Masayoshi Son spoke to the CCA conference, encouraging the small carriers to fight on (CD March 28 p13). On Wednesday, Sprint unveiled an agreement under which small carriers could use its network for data roaming.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Verizon Wireless and AT&T are the problem, not Sprint or T-Mobile, and “I'm not hung up as much on Sprint/T-Mobile as I am the fact that the duopoly continues to get larger,” said Michael Hagg, CEO of HTC. “There’s two, and everyone else is getting eliminated is the bigger issue. … It doesn’t matter if there are four or 14, you're heading down the path of something bad when there’s only two.”
"I would just argue with the concept that there’s four national carriers,” said SI Wireless CEO Terry Addington. “I think there’s been two behemoths that have developed and there’s the rest of us.” That’s why both Sprint and T-Mobile are now members of CCA, he said. “If our regulators and lawmakers still believe in the concept that there’s four national carriers, there’s not,” he said.
There is nothing “magical about the number four,” said Jonathan Foxman, CEO of MTPCS.
Addington said he’s very encouraged by Sprint’s announcement of the partnership with small carriers. “I came into yesterday very skeptical,” he said. “I've had a relationship with Sprint for several years now. It has been challenging and that’s probably an understatement. But I've spent time with [Sprint’s] Masa and he made me a believer. … I am just absolutely turned on by Masa’s proposal.” But Addington said making the agreement work won’t be easy. “Executing it is going to be incredibly difficult,” he said. “There are so many components, there are so many aspects to it.”
"I thought it was very exciting and refreshing,” PC Management President Linda Martin said of Son’s comments. Both Sprint and T-Mobile recognize that working together is important to their survival as well, she said. “They now recognize that AT&T and Verizon are credible threats to their own existence,” Martin said. “It’s easy right now to find all the things that might be too difficult, that might not work, but I think we should give credit too. This is the first national operation who has really reached out to this organization to say ‘we want to be your partner.'"
The CEOs said they hoped a similar agreement will be forthcoming with T-Mobile. The future is unclear for smaller carriers, they agreed.
"Can we survive another five years?” Addington asked. “It’s touch and go. Every day is touch and go.” The Sprint partnership is helpful “but it may not come at all if we don’t get behind it,” he said. “It’s up to us to help drive this and make it come earlier, make it come as quickly as we can get there.”
"I don’t think every carrier that’s here today is going to make it, there will be continued consolidation,” Martin said. But she said the Sprint announcement could help some carriers survive. “Not all of us will make it,” Foxman said. “Hopefully, some of us will be giant successes. There will be bumps along the way, but much more so than not I think we're turning a corner."
Hagg said he has been pessimistic in the past about the future of competitive carriers. “Through the years there’s been numerous times where we've said ’this is going to kill us,'” he said. “If I had a dollar for every time I said that I wouldn’t be sitting here, I'd be out on the beach doing something different.” But every time a new big challenge came up, some carriers didn’t survive, Hagg said. “We happened to be one that did.”