T-Mobile US chief executive John Legere this week talked up his company’s MVNO p artnership with Google Fi and said it points to a future where wireless operators merge with cable providers.
Google Fi "is going to make people think differently about wireless, and I love that," he said during T-Mobile’s first quarter investor call on Tuesday.
Following months of mounting speculation, Google last week announced Project Fi, an MVNO service that seamlessly roams between WiFi and T-Mobile’s and Sprint’s cellular networks. The service costs $20 per month for voice and SMS, plus $10 per GB of data.
"Anything that shakes up the industry status quo is a good thing for both U.S. wireless consumers, and T-Mobile," Legere said.
He explained that content, social media and entertainment services are increasingly being delivered over the Internet, and that the Internet is increasingly accessed via mobile networks, so "there is a real synergy" between Google and T-Mobile.
"We think far too simplistically about the four major carriers and what the structure of the industry is going to be, without understanding that the tangential players in various industries are touching mobile players," he added.
With that in mind, Legere reiterated that he expects consolidation will still take place in the U.S., albeit not necessarily between two mobile operators.
M&As between major players – or the lack thereof – have been a theme in the U.S. for years, with competition regulators thwarting both AT&T’s attempt in 2011 to acquire T-Mobile, and Sprint’s proposed merger with T-Mobile in 2014.
Last week, it was the turn of the cable industry, with Comcast abandoning its $45.2 billion bid for Time Warner Cable (TWC) in the face of staunch opposit ion from the Department of Justice (DoJ), the Federal Communications Commission (FCC), consumer lobbyists, and over-the-top (OTT) service providers.
However, while it is proving difficult to convince the authorities to sanction consolidation between direct competitors, Legere said on Tuesday there is the distinct possibility of tie-ups between players in overlapping markets.
"I’ve always said on consolidation, it’s not a matter of ‘if’, it’s ‘when and how’, and now I’m going to add, ‘and who’," he said.
"You need to think about the cable industry and players like us, as not competitors but potential partners," he continued. "There’s a far more broad set of potential partnerships, integrations and mergers that the United States could be looking at, and in that case I think you will see consolidation in a much broader sense."
Indeed, the U.S. may be on the cusp of a combination of the kind Legere describes, in the form of AT&T’s $48.5 billion acquisition of satellite TV provider DirecTV.
Sources cited late last week by The Wall Street Journal claimed that neither the DoJ nor FCC has raised significant objections to the deal, which was struck in May 2014.
"In five years, we will think it comical that we thought about the industry structure as the four major wireless carriers," said Legere on Tuesday.
