After months of flirting, Sprint and T-Mobile have decided not to merge—but the rapidly changing nature of the telecommunications industry could have them both wishing they had been able to come to terms in the years to come.
While the companies say they were “unable to find mutually agreeable terms,” Jeff Kagan, a telecom analyst, warns that big competition is looming, which could over overshadow both companies.
“Ten years ago we had a lot of little players in the industry,” he says. “Today we have fewer larger players, but …we’re seeing new entrants, like Google. You’ve also got Comcast, which entered with Xfinity mobile. You’ve got Charter, which is going to enter the mobile space next summer. … You’ve got a lot of new big brand name companies that are coming in and carving out a slice of the pie.”
It makes sense for Internet providers to take an interest in the mobile space. Last year, mobile internet use surpassed desktop usage for the first time and the trend isn’t likely to reverse itself.
Sprint and T-Mobile have big marketing budgets, and may target Verizon and AT&T in their commercials, but they’re largely competing against each other as they both attempt to woo customers willing to leave the two industry giants.
The bigger question, though, is will big Internet companies swoop in and take customers from both?