This deal would result in the new merged company blocking potential new competitors from entering the wireless market.
- A competitive wireless marketplace over the long term requires new entrants that can bring innovative products and services to consumers. So-called light MVNOs, which resell a wireless carrier’s service end to end, offer little opportunity for innovation.
- But full infrastructure MVNOs, which only use the “last mile” of the carrier’s network and manage the rest of the wireless service through their own networks, are emerging as potential new entrants. These companies are best positioned to bring competition because they rely mostly on their own technology to provide service and can innovate on products and pricing.
- But letting Sprint and T-Mobile combine significantly undercuts this dynamic because both companies have historically been the main partners for MVNOs – meaning most of these upstart firms would have just one carrier to work with. Right now, 68 percent of all MVNOs rely on Sprint or T-Mobile.
- Even worse, T-Mobile has shown open hostility specifically toward these full-infrastructure MVNOs – and combining with Sprint would give them even less reason to work with companies that could be a competitive threat. The company has repeatedly chosen not to commit to supporting full-infrastructure MVNOs.
Consumers deserve more competition, not less. MVNOs are a way to get there – but only if regulators make sure they have a fighting chance to get in the game.