T-Mobile US now trumpets the size of its low-band spectrum assets, in principle allowing T-Mobile US to compete toe-to-toe with Verizon and AT&T in the mobile market, in terms of coverage.
All that should lead to greater marketing issues for Verizon, which traditionally justifies its higher prices by claiming higher performance and network quality. That is becoming more difficult to sustain.
In principle, and “all other things remaining equal,” that is a plausible belief. Of course, nothing ever remains equal in the telecom market. Verizon will respond, in the area of adding spectrum resources, likely in a couple of ways. Spectrum sharing, spectrum purchases, spectrum refarming and use of small cells are among the tools available.
It also will take time to bring all the “repacked” spectrum to market, so only smaller portions of the 600-MHz spectrum acquired by T-Mobile US can be brought to bear within a year or so.
Still, Verizon does face a key brand promise problem. It always positions as the “best quality” network, and such claims increasingly are under challenge. Though Verizon can claim a lead, it is a slim lead, indeed. Verizon’s traditional leadership in speed and coverage are under strong challenge.
Also, any supplier with millions fewer customers will have an easier time than a heavily-loaded network operator in bringing the benefit of new spectrum to bear. In other words, any given amount of new spectrum brings more benefit to a less-heavily-loaded network than to any network with high usage.
All that should lead to greater marketing issues for Verizon, which traditionally justifies its higher prices by claiming higher performance and network quality. That is becoming more difficult to sustain.
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