After more than a year of speculation, it seems that German telecom giant Deutsche Telekom will not buy U.S.-based wireless giant Sprint Nextel Corp. (NYSE: S). Deutsche Telekom CFO Timotheus Hoettges indicated that the American wireless competitive landscape had consolidated enough, and the control that the four largest wireless carries in the U.S. have wouldn't make a purchase wise.
Hoettges was quoted as saying, "There are four national players in the U.S. market for 300 million households, while in Europe, where we have 350 million households, there are 50 to 70 operators." It's pretty clear that he thinks the U.S. wireless market is controlled by an oligopoly of operators, which seem to move in tandem with each other in terms of price control and roll out of new technology. Do the "large four" -- Verizon (NYSE: VZ)Wireless, AT&T (NYSE: T), Sprint Nextel, and T-Mobile USA -- move in lockstep with each other for the most part to not give any of the competition a large advantage?
It's true that in Europe, there are dozens of operators (from large to small) and consumers have a huge choice in choosing which one they want their wireless service with. While the U.S. has several national and regional wireless operators, the "large four" control the vast majority of the subscription base.
Perhaps Deutsche Telekom wanted a little more openness than the U.S. wireless market was willing to give. After all, a combined T-Mobile USA/Sprint Nextel would have faced a severe uphill battle in terms of trying to merge technologies and keep a reign on the top two carriers who have a single network and vast economies of scale.
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