T-Mobile Execs: We See More Industry Consolidation Down The Road

Speaking at the 12th annual Morgan Stanley Technology, Media and Telecommunications conference, T-Mobile CTO Neville Ray and T-Mobile COO Jim Alling both spoke about the company’s future with MetroPCS and the industry beyond.

For Alling’s behalf, he discussed the idea that more industry consolidation is coming and that the possibility of going from four national carriers to three remains a distinct possibility.

“Is it possible that four major players could go down to three?” Alling said, according to Bloomberg. “I think that is possible, and likely in the longer term. I don’t know how likely that is, based on the current regulatory environment” of the Obama administration, which moved to block AT&T’s (NYSE:T) proposed $39 billion acquisition of T-Mobile last year.

MetroPCS CFO Braxton Carter, speaking at the same event with T-Mobile said that he expects MetroPCS shareholders to vote on the T-Mobile deal in February or March. When the topic came up on other suitors for MetroPCS, Carter reaffirmed his support to the T-Mobile deal:

“As to other parties coming in, we had discussions with multiple parties in the past year and half,” Carter said, according to Reuters. “I have no way to speculate what could happen but we are 100 percent behind this transaction.”

Carter added: “We think it is the right transaction, and we are confident our shareholders will approve it, there are massive synergies from this, the creation of a value player with a multi-segment strategy.c

T-Mobile CTO Ray stated that a “A major part of our strategy is to drive some shift in share amongst the big four, and that’s going to be the richest area we see with the greatest return.”

Ray believes there is short-term and medium term opportunity for the company to aggressively grow and take on customers that may grow frustrated with AT&T or Sprint.

Allling expects that the company can move to halt customer departures and begin posting “moderate growth” in contract subscribers sometime in 2014.

Bloomberg, Reuters, Fierce Wireless

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  • squiggleslash

    So T-Metro might buy Sprint? ;-)

    In other news, apparently Google is considering partnering with Dish Network on creating a fifth major network. If that network is as major a game changer as, say, their new broadband network, then things are going to be very positive for phone users.

    • xmiro

      AT&T and Verizon suits probably got heartburn when they heard that.
      Dish has 700Mhz spectrum but it wants LTE to be on some weird 1600mhz channels that no one else in the world uses, more weird than T-Mobile’s AWS

    • SouthernBlackNerd

      I would love to have a true gamechanger in the market, but google partnering up with dish is not that person. they only have 40mhz and it is in the s-band, which is 2ghz. Competing with ATT/Verizon is going to take a decent amount of >1Ghz spectrum. Lets Also,lets not forget that Dish has 0 towers, and unless they host on Tmobile/Sprint, they are not going to have nationwide coverage for a long time.

      People who want a true game changer should be looking at NewCo and New Sprint, because those are likely to be our only choice.

      Dish has 700mhz, but it is 6mhz unpaired and not nationwide.

    • Whitney

      Softbank buying Sprint

  • Chris

    So what does this mean? I don’t really get it. I like when you add your thoughts at the end, David. They think there will be more buying/selling/merging?

    • xmiro

      It means two executives are talking before a bunch of investors saying that down the road, two of the big four wireless carriers might merge. It’s just a guess, I don’t know what they base that speculation on. Wallstreet likes constant growth and right now growth in the wireless sector is slowing down so it’s one of the things they probably want to hear.

      You still have the current make up of the DOJ that wants 4 national carriers so if there were to be a merger it might not be attempted in the next 4 years, or if it is it could come with heavy strings attached.

      Sprint is hurting because of a few things, including the $20b iPhone deal they signed, the iPhone hasn’t done squat for them so they sold 70% to Softbank otherwise they wouldn’t have money for upgrades which are happening slowly. Who knows what that would do, maybe it would help. Softbank seems aggressive and it might go after T-Mobile and risk it just in case, you never know. I doubt AT&T would try a merger again after the way they gaged on T-Mobile, plus they are $63+ billion in debt

      Personally I’d rather see a pooled nationwide network, similar to UK’s Everything Everywhere, where several entities are splitting the cost of running and upgrading the network.

  • Winski

    You people are like republicons… Can’t see the forest that continues to bash you in the face with a steel chair, for the tree (singular) that continues to cut your guts out…

    Add the iPhone to your line-up OR PERISH!

    • AndroidProfit

      Are you ok?

    • Bronze 6

      oh, i never knew that the iphone is making sprint filthy rich. (obv sarcasm)

  • AndroidProfit

    Tmobile buying up a large prepaid carrier is HORRIBLE for those of us who would prefer to jump into a no-contract scenario. Of course Tmobile wants to buy up the competition! That is where Tmobile is headed! Value plans! Cheaper YES…BUT they make up for that in OVERPRICED phones! So now soon we will have NO decent pre-paid alternatives!

    Funny how soooo many people cried when it came to ATT doing the EXACT SAME THING….buying up the competition. $599 for example for the SG3 at tmo and $499 MetroPCS…OF COURSE tmobile wants to buy the competition!

    • Jose Hernandez

      You do know that T-Mobile and MetroPCS will continue to operate as two different companies with two different names and that pre-paid will remain a big part of their business model. Right? Are you seriously crying over $100 bucks? There are other pre-paid options available.

      • Guest911

        He doesnt know that and neither do you as you are wrong. But…go on….

        • TMOTECH

          Actually he is correct. It was plainly stated in the press release and on many company webcasts that the 2 companies will operate independently until the LTE network is complete and a large percentage of metro customers are migrated to T-Mobile handsets. That will take at least 1 1/2 years if not more.

        • Jose Hernandez

          It has been posted many times in many places. A simple Google search. Thanks for the back up TMOTECH.

      • archerian

        this is only till 2015

    • Aaron Burke

      T-Mobile also has a prepaid option, e.g., “Monthly 4G”. They’re also the most common network used in MVNOs. Simple Mobile, Straight Talk and Solavei both use T-Mobile. Straight Talk is the only one of the three who also offers an AT&T option.

      • 21stNow

        I think that there are more MVNOs using AT&T’s towers. Red Pocket, H2O Wireless and Jolt are the ones that I can think of off the top of my head. Which ones have more subscribers is a different story.

    • xmiro

      Over 24 months, buying a full priced phone, say a Galaxy S3, from T-Mobile and going Value plan is cheaper than the advertised price on Classic, and cheaper still compared to AT&T

    • Ashley

      It’s only $599 this weekend. $549 actually on Sunday and after.. Does the metro s3 have the same specs with 2gb ram? I really don’t recall but I’m thinking it was missing something.

    • prohibido_por_la_ley

      You pay more for the phone but pay less per month. This is how its always been. Don’t like it? Shut the hell up or buy from eBay.

    • Christopher Woodruff

      The problem with most people is they still rely on the subsidy to purchase their phones. Google is making good strides at reducing the overall cost of purchasing a phone. Hopefully, others will follow, but I doubt since unless you’re Apple, the hardware business doesn’t have that great of margins.

      As far as buying up the competition, it was only logical that T-Mobile purchase Metro given their spectrum holdings. I doubt it had everything to do with their phone prices. T-Mobile can sell phones more expensive than the competition, but the bulk of any of their revenues come from the service, not the hardware.

      Personally, as long as they continue to support T-Mobile’s frequencies, I’ll be buying Nexus phones. Cheaper and with excellent specs. You could also probably buy your phone from a third party vendor as well.

  • wsj

    I can see three, all three with iPhones, guess which one goes bye-bye

    • RLB63

      Tmobile is expected to get the iphone in 2013. They just need to upgrade their network which is in the works. So your comment seems uninformed.

      • archerian

        when you mean “expected to get the iPhone”, do you mean officially with Apple’s support, or via network re-farming? If its the former, chances are low, as they already spent good time and money for the latter.

    • v

      android is already close to 80% smartphone market. In another year or so, probably even more. I suspect that blackberry would get on par with iphone this time next year. No one will be talking about iphone except the most ardent apple FBs.

  • 21stNow

    No! The US needs more national carriers than Canada does, seeing that Canada has only one-tenth of the US population.

  • Aurizen

    wait im not sure what they mean by “Is it possible that four major players could go down to three?” do they plan on being bought by someone else in the future or buying one of the big 3?

  • TMoFan

    I think this is a signal for a potential buyout from Sprint/SoftBank. I don’t think it’s any secret that DT wants to get out of the US and they’re going to use Metro to do it. Not now, but several years out. By that time LTE will be dominant so I don’t think merging different technologies will matter as much as it does now.

    • xmiro

      they can signal with smoke sticks, the DOJ made it clear a while ago

      • archerian

        the DoJ cannot arbitrarily enforce anything, they have the burden of proof, their record isn’t 100%, and what they said in 2011 might not be relevant in a few years

  • ACNJR28

    T-Mobile may still be around IMO. They always pull through some how. Around the tri-state area(i’m in central/northern Jersey)…I hear more complaints with Verizon(high prices and holding phone updates), Sprint(Poor service overall), and At&t(high prices and some service/data issues) and no so much of T-Mobile. I think Sprint may be knocked out of the game.

    • ACNJR28

      Also during Hurricane Sandy it seem only T-Mobile and Verizon had service. At&t was shot and I think Sprint was too.

    • Whitney

      Sprint just filed FCC papers for softbank

  • randomnerd_number38

    I got a little theory for ya. There’s at least a moderate chance DT still wants out of the US wireless market, right? If that’s true, what do you think are the chances they would sell their majority shareholder status in the T-Mobile/MetroPCS “NewCo” to Google a little down the road?

    I may be dreaming, but stranger things have happened. Any thoughts on this?

    • Jose Hernandez

      That would be awesome.

    • Mirad77

      That wouldn’t mean the NewCo is going out but just transferring hand per your theory.

    • prohibido_por_la_ley

      T-mobile is not merging with Google stop talking nonsense.

  • FILA

    I hope hes meaning that T-Mobile would gobble up Sprint or he sees Sprint out of business by then

  • I think the prepaid divisions and MVNO’s are going to flourish and become the real winners soon, especially if they let off on the data caps. Consumers are getting smarter in the US and realizing that being tied to a contract just to get their favorite phone for “cheap” is stupid. Value plans are ok for family plans, I guess. They still get you with the $35 activation fees per line, and the silly little extra fees that come on your bill every month.

    Me personally, I’d love to see the no-contract Even More Plus plans return. They were basically the same as Value plans without a contract, but with all the benefits of a contract. I had EM+ all the way up until awhile back I switched to the Monthly4G $30/mo 100 min, unlimited text, unlimited 4G (5gb) plan to save some bread. Not a massive talker and I’ve learned to deal with a 100 cellular minutes and just make other extended Google calls thru Talkatone. I also sometimes pay just $3 bucks a month for unlimited Skype calls that lets me call anyone using my T-Mobile cell #. This alternative is very solid on my home wifi, and here in Chi-town where the T-Mo 42mbps network is extremely solid for VOIP call.

  • M42

    T-Mobile may attract customers frustrated with AT&T or Sprint? Once they switch to T-Mobile they’ll find out what real frustration is.

    Google is contemplating getting into the game and if they do that will be a game changer.