Competition in rural America is getting better — and worse

Wireless competition is getting better and worse in the US. T-Mobile’s energetic rural push will bring stronger competition to hundreds of small markets and will keep affordable prepaid services within reach of many rural residents. Yet while T-Mobile’s rural push is largely from scratch, it is partly derived by cannibalizing Sprint. AT&T is also making a major network push in rural areas, which centers around its FirstNet effort. FirstNet uses low 700 MHz spectrum, so its signal travels far. The carrier is building out more than 1,000 purpose-built FirstNet sites. Verizon is thought to have the best coverage in rural America, but it got there through acquisition, including the 2009 acquisition of Alltel. Alltel was a multi-region carrier that was famous for serving small and rural markets. The deal catapulted Verizon into a leadership position for rural coverage. Now the company is acquiring TracFone, which has more than 20 million subscribers. While big carriers are expanding into rural markets and providing customers with more coverage and choices, the elimination of their competitors is negative for rural competition.

[Jeff Moore is Principal of Wave7 Research, a wireless research firm that covers US postpaid, prepaid, and smartphone competition.]