As the telecom sector continues to be dominated by AT&T and Verizon, inspite of them moving towards usage-based data plans, companies like T-Mobile, Sprint, MetroPCS and Leap Wireless are struggling to keep up with the competition. Both the leading carriers are investing billions in trying to build a network that will be able to handle the rise in smartphone data use in the coming years.
Verizon’s recent announcement to introduce the Share Everything plan that allows families to operate multiple devices through a single account by adding smartphones and tablets to the same plan has sparked off the possibility of concentration in the market. Analysts have regarded this move as a welcome change in the telecom industry that has all along offered different prices for different services, posing difficulties in comparing prices. AT&T intends to introduce similar plans. Though both the carriers will probably make massive profits from these family based plans, it will be at the expense of customers.
Meanwhile, second tier players are merging and in addition to this, the DISH Network is fast coming up, posing a challenge to Verizon and AT&T. While Verizon and AT&T plan to offer the iPhone to its customers at a subsidized rate of $500 per device, carriers like Sprint and Leap Wireless are adding the iPhone to their network by offering pre-paid mobile plans. Sprint is considering a merger with MetroPCS and T-Mobile as it could work in their favour, helping them cope up with the struggle to add subscribers to their network in a profitable manner. At the moment, AT&T and Verizon combined dwarf nearly all the other carriers combined, and enjoy very favourable economies of scale. By merging, smaller carriers like Sprint hope to take advantage of the same.
Amidst all of this, DISH Network’s plans to build a wireless network may pose a threat to the entire telecom industry. After having successfully dealt with cable providers in the past, the DISH Network is now looking at competing with Verizon and AT&T. However, approval of arcane spectrum regulations is still an obstruction in their way. Once FCC’s approval is completed, DISH will possess valuable unused spectrum in the US and will be able to build a comprehensive pan-US terrestrial wireless network, analysts hope.
Even though it is widely feared that Verizon and AT&T will raise their prices and earn more revenue as their customers increasingly become addicted to smartphones, constant changes in the wireless landscape brought about by companies like DISH and the iPhone will continue to keep a check on the leading carriers.