New Round of ISP Consolidation Already Started: Entner
The telecom industry will see further consolidation of smaller carriers, similar to what happened 20 years ago, Recon Analytics’ Roger Entner said Wednesday during a webinar hosted by Georgetown University's Center for Business and Public Policy. There are still about 1,300 ISPs left in the U.S., which is “a staggering” number, Entner said. He cited examples of the deals being made, including T-Mobile’s purchase of stakes in fiber-based providers like Metronet and Lumos (see 2507090034). There’s a “tremendous amount of activity here underneath the surface" that only sometimes makes headlines.
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More spectrum transactions are also coming. Entner said, noting that he was always skeptical that EchoStar, which is selling off spectrum, could offer a wireless service that would differentiate itself from other providers. FCC Chairman Brendan Carr’s pressure on EchoStar Chairman Charlie Ergen to sell its unused licenses (see 2509090036) was “a blessing in disguise,” Entner said. “It put pressure under Charlie’s butt to get things going.” EchoStar also wasn’t meeting a commitment to serve rural America, which didn’t sit well with Capitol Hill, he said. “Every senator is a rural senator.”
Greenhill analyst Jennifer Fritzsche said she didn’t think investors took it seriously that EchoStar’s Boost would become a fourth national facilities-based carrier. But since Boost refocused on becoming a virtual network operator, tower stocks have taken a hit, she said. Wall Street believed in what Boost could achieve “more than I gave it credit for.”
Entner said that next year is shaping up to be “epic” for the wireless industry, with Verizon and T-Mobile under new CEOs (see 2510060045 and 2509220029) and AT&T and Verizon under pressure to compete for subscribers with T-Mobile. “If the numbers don’t change by the end of 2026,” T-Mobile will be the top U.S. carrier in subscriber count. The carrier is already “far and away” No. 1 based on evaluation, he noted. Verizon decided under former CEO Hans Vestberg to put all its emphasis on wireless service revenue growth, EBITDA margin and free cash flow, he said. The easiest way to grow those measures is by not growing quickly “or not growing at all.” A new subscriber is, for at least a year, “cash flow negative,” he added.