If fewer mobile competitors exist in a market, does that lead to lower–or higher–consumer prices? That is not an easy question to answer. In the short term, even mobile consolidation on a major scale still results in lower retail prices. Note the mobile market in India, where prices continue to fall, even as consolidation increases. Less clear is the long-term impact.
Some mobile operators and their supporters argue there is a virtuous circle between less intense competition, higher operator profitability, and increased investment, which has resulted in better consumer outcomes.
That is why consolidation of almost any mobile market from four providers to three is considered desirable.
Equity analysts almost always argue the reverse: that consolidation leads to less competition, and therefore higher profits.
At least one study by Wik Consult did not find that consolidation actually leads to an improvement in consumer outcomes (lower prices, faster speeds).
The major potential drivers of better consumer outcomes (faster connection speeds, higher mobile penetration and higher data usage) are the result of demand, more than changes in supply, Wik Consult argues.
Though there is no fully direct and universal correlation between the number of providers in a market and the amount of consumer benefit generated by that competition, neither is there clear evidence that fewer competitors in a market (three, in place of four mobile operators) necessarily has a direct bearing on investment in next-generation networks.
Carriers invest what they must, when they must, partly in response to customer demand, partly to stay competitive with other key providers with whom they compete.
Sprint and T-Mobile US rightly argue a merged and bigger company will be better positioned to compete with AT&T and Verizon. Whether that also means better consumer outcomes (lower prices, for example) is the issue.
I have yet to find an equity analyst who believes the merger will actually lead to lower prices. On the contrary, they tend to favor the merger precisely because it increases the pricing power of the new firm, and tends to discourage ruinous price wars that also affect the financial health of AT&T and Verizon.