Two weeks ago we looked at how Wireless Runs Afoul of the Justice Department including why eSIM is a Building Block Technology of 5G. This week we look at how these trends impact the Merger of T-Mobile and Sprint.
If T-Mobile and Sprint are allowed to merge, they will hold about 27% of US market share with the remainder held by ‘all others’. The eSIM issue might appear to pit all mobile operators against the interests of the IT/Internet companies as they stand to lose control over part of the converged network from their perspective. However, because T-Mobile and Sprint hold such small shares of their markets and stand more to gain by partnering than competing in the arena of media and IT services through acquisitions, the two should seek either a middle ground agnostic approach to control issues or become advocates for the participation of the ‘opposing competitive camp’.
Who else may gain or lose?
The cable companies may have the most to gain by open eSIM device proliferation because they start with such a small share of wireless subscribers.
Sprint and T-Mobile will continue to face an uphill battle against VZ and T no matter what happens with eSIM or other scrutiny. The investigation by the Justice Department could sink into the background or gain more public attention going forward. If it gains awareness as an issue or broadens into other areas of collusion, that can benefit the two junkyard dogs because one aspect of complex human nature is to ‘root for the underdogs’. That is particularly the case when the underdogs are positioned as standing up for the ‘little guys’, in this case, the ‘little guys’ include businesses as well as consumers.
The eSIM issue exposes more than an obscure feature embedded in the new generation of Smartphones: Wireless companies are ’embracing and extending’ their domains to include home broadband, media, eBanking/mobile payments, autonomous vehicles, IoT… the motto may as well be stated as “Resistance is futile. We will assimilate you… into the BORG collective.”
Big businesses like to be in control of their own destinies and have multiple suppliers. Most large companies require that their purchasing departments vet multiple suppliers. That is more so for products and services that are essential to their corporate or government entity success.
5G/5G New Radio will gain ground in the semi-private reserves of business networking and cloud computing. This is both a great benefit and also a threat to enterprise and government entities. It can benefit competition, help lower costs while greatly expanding flexibility… if it is not fettered by monopolistic control.
Those most threatened by the onrush of 5G include much of current IT equipment and service suppliers and some of their customers who may be squeezed out.
As the competitive clash of the two titan business segments, IT/Internet and Mobile/Multi-service Wireless Operators takes place with the rollout of 5G, we think that DOJ will take an active role to ensure that the playing field is open and level. This clash influences how companies will shape and market their products and company personas. As spectrum has become a fairly well understood factor, the impact of DOJ on the industry may become greater than the impact of the FCC in coming years.