LAS VEGAS--The fact that Sprint (NYSE: S) abandoned a merger with T-Mobile US (NYSE:TMUS) in the face of opposition from regulators, especially at the FCC, has set back the cause for competition in the U.S. wireless market, according to C Spire Wireless CEO Hu Meena.
Speaking here at the Competitive Carriers Association conference in conjunction with CTIA's Super Mobility Week, Meena said that "Sprint should have been able to move down the path toward acquiring T-Mobile" and that a combined company "would have provided an entity that wasn't a legacy Bell company, with enough scale, enough size and enough clout."
Meena was speaking on a panel with other executives from competitive carriers. He said working with that combined company would have allowed smaller carriers "to bring true competition to the marketplace as opposed to walking up to the FCC with a laundry list of items that we need to be competitive again."
The C Spire chief, long a critic of the dominance of AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ), said he regretted that the FCC signaled such strong opposition to the deal, which he said "would have given this industry a shot in the arm." Instead, he said, carriers have resorted to competing primarily on price and the "only innovation you see is how low our rates can go."
Sprint parent SoftBank reportedly dropped the pursuit of T-Mobile last month after it became clear the deal would not be approved by regulators. Speaking here this week, FCC Chairman Tom Wheeler said the FCC's efforts to retain four nationwide wireless carriers have helped wireless customers. "The American consumer has been the beneficiary: new pricing and new services that have been spurred by competition," he said.
"I know that achieving scale is good economics, and that there is a natural economic incentive to accrue ever-expanding scale," he said. "We will continue to be skeptical of efforts to achieve scale through the consolidation of major players."
"We lost something when the concept of marrying T-Mobile and Sprint went awry," said SI Wireless CEO Terry Addington
The executive roundtable also included Carolina West Wireless CEO Slayton Stewart, nTelos Wireless President Rodney Dir and Jay Ellison, U.S. Cellular's (NYSE:USM) executive vice president of operations. The executives also touched on other hot-button issues, including next year's planned incentive auction of 600 MHz broadcast TV spectrum.
Wheeler said here this week that it's crucial that wireless carriers participate in the auction.
Stewart said that if smaller carriers "had greater assurance we won't have the issues with interoperability that we had with 700 MHz, they wouldn't have to worry we'd show up." After the 700 MHz auction in 2008 the band became fragmented into multiple band classes. Many of the smaller carriers, which purchased 700 MHz Lower A Block spectrum in Band Class 12, felt like they got shut out of the wider 700 MHz device ecosystem, especially after AT&T carved out its own band class, in Band 17. T-Mobile also now owns a trove of Lower 700 MHz A Block spectrum, which it bought from Verizon and several smaller carriers.
However, after years of debate and struggle, AT&T last fall agreed to reverse its position and support both Band Class 17 alongside Band Class 12. Specifically, the company said it will develop, implement and deploy throughout its network multi-frequency band indicator, or MFBI, capabilities that will let its network operate simultaneously in both Band 12 and Band 17 and support devices in both band classes. Yet AT&T technically has until September 2015 to do so.
Meena said that "in the real world, functioning interoperability does not exist" on a widescale basis. Apple's (NASDAQ: AAPL) new iPhone 6 and 6 Plus have support for 20 LTE bands, but not Band 12. "It will be a big deal when Apple does include Band Class 12."
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