Here’s why Verizon and AT&T don’t need to worry about suffering BlackBerry’s fate

BlackBerry's announcement that it is laying off 40 percent of its staff in the wake of massive losses is a reminder of just how volatile the smartphone market is. Hardware and software vendors in the smartphone business can see their fortunes wax or wane with astonishing speed. Yet the market for wireless service is very different. There have been no significant changes in the competitive landscape of the wireless service market in the last decade. And that's not a coincidence.

The market for wireless service in the United States has barely changed at all over the last decade. In 2003, there were six major wireless carriers: Cingular, T-Mobile, AT&T, Verizon, Nextel and Sprint. By 2008, Cingular had merged with AT&T and Sprint had merged with Nextel. Those mergers left four national carriers. Verizon and AT&T led the market, with Sprint and T-Mobile taking third and fourth place, respectively. Today, nothing has really changed. Verizon and AT&T still lead the market. Sprint is still in third place. And T-Mobile still brings up the rear. Not only have there been no significant new entrants into the wireless business over the last decade, but the relative size of the major players hasn't even changed very much.

What accounts for the smartphone market's dynamism and the wireless market's lack of it? One factor is that innovation simply isn't very important for building wireless networks. Another factor is that building a cellular network requires one of the scarcest and least liquid resources around: spectrum. Incumbent wireless providers have already claimed a large share of the spectrum available for private parties to build wireless networks. New wireless auctions happen infrequently and take millions, if not billions, of dollars to win. That leaves limited room for entrepreneurs to disrupt the wireless business.