A jumble without wires

The wireless industry seems to be standing at the doorstep of consolidation, but it’s far from clear how it will shake out.

The wireless industry seems to be standing at the doorstep of consolidation, but it’s far from clear how it will shake out.

Rumors and speculation hit a fevered pitch recently with everyone from Cingular Wireless, Vodafone, T-Mobile, Nextel Communications and NTT DoCoMo reportedly interested in acquiring AT&T Wireless.

No public offers have yet been made, but some analysts were not surprised by the activity. Others, however, remained skeptical that big bang mergers of this sort result in little, if any, mutual benefit for the players, the industry or the customers.

In the long term, users might expect better rates and service packages from the pooled resources of fewer players; but in the short term, users can expect an industry in flux.

Both Cingular and AT&T Wireless, the supposed union that kicked off the rampant speculation of two weeks ago, operate GSM networks. So, too, does T-Mobile. The international carrier has been vying for a bigger U.S. presence for some time.

As GSM is the wireless network standard nearly everywhere else in the world outside of the U.S., it’s not surprising that DT, NTT DoCoMo even Vodafone would also be interested in AT&T Wireless.

NTT DoCoMo already owns 16% of AT&T Wireless based on a $9.1 billion investment the Japanese company made just over three years ago.

Vodafone is the biggest wild card. The U.K. carrier has a significant joint venture in Verizon Wireless. Vodafone is looking to get out of its deal with Verizon and hook up with a U.S. company that can support GSM, analysts say.

Verizon, the largest wireless service provider in the country, could seek a partnership with Sprint PCS or other smaller CDMA service providers.

Assuming the GSM service providers and the CDMA service providers will merge in some form over the next couple of years may be logical, but may also be too simplistic. For one, Nextel – the fourth-largest wireless carrier – does not neatly fall in with either camp.

With the lowest customer churn rates and strongest annual revenue per user of the six, Nextel operates a proprietary network that puts it on an island.