Prediction 3: Tier 2 and Tier 3 U.S. carriers will become scarce - 2009 Predictions

The U.S. wireless scene is beginning to look a little like the duopoly that existed back in the early 1990s when the U.S. just had two operators in every market. In 2008 we saw Verizon Wireless snap up Alltel [1] for $28.1 billion bringing its total subscriber base to more than 83 million. Likewise, AT&T's proposed purchase Centennial Communications will tip its subscriber base to more than 75 million.

The gap between the Tier 1 and the Tier 2/Tier 3 carriers is growing wider. Currently there are only seven networks with fewer than 7 million subscribers [2] in the U.S. and if AT&T's planned purchase of Centennial is approved, that number will drop to six.  

This disheartening trend means that Tier 2 and Tier 3 carriers will continue to have difficulty securing state-of-the-art handsets for their customers (at least not until long after those devices have made their way into the hands of Tier 1 operator customers).

For vendors the shrinking base of Tier 2 and Tier 3 carriers means fewer customers to buy their equipment. Obviously if you're a vendor with a Tier 1 customer base, this isn't a problem. But for smaller vendors, the Tier 3 carriers often offered them a chance to get a foothold in the market.