More Operator Consolidation Predicted… Just 'Cause

After Sprint and Nextel merged, the consensus viewpoint was that the major consolidation in the mobile carrier space was done, mostly because there weren’t any more top-tier operators left to buy. Buyouts of smaller, regional carriers will continue, just as they have for a few years, but it’s really hard to see any more huge deals on the scale of Sprint-Nextel or Cingular-AT&T Wireless, but BusinessWeek disgrees, saying the market is still too crowded. It’s hard to follow the logic, though: Verizon looks more interested in buying back Vodafone’s stake in Verizon Wireless than trying to swallow somebody as big as Sprint, or even Alltel (even if the move doesn’t make a lot of sense), while the only buy for Cingular that would make “sense” is T-Mobile. But Deutsche Telekom doesn’t want to sell, and saying that Cingular would be a good buyer for T-Mobile simply because they both use GSM is an old and oft-repeated pronouncement that ignores any other factors outside of network technologies — though it’s one BW trots out. A bigger issue could be the regulatory environment. While it’s true that the government has been pretty permissive on these big mergers, it’s doubtful they’d look too kindly on another megamerger as worries about how much spectrum carriers control flare up.

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