Even as behemoths like Apple and Google fend off antitrust actions across the globe that are aimed to break the companies’ stranglehold over consumers and markets, the telecom sector (mobile telephony, fibre-optics and Internet connectivity) is experiencing a wave of consolidation. Unlike the former, where the objective is to break oligopolies, the latter trend is bound to create new ones. A few days ago, SpaceX, the pioneering satellite company promoted by Elon Musk inked a $17-billion deal to purchase Echostar’s spectrum.
Echostar offers telecom services through a brand, Boost Mobile, which has 7.5 million subscribers. After the buyout, these customers can access the famed-and-expensive Starlink Internet and mobile services of SpaceX. Musk’s company will use the additional spectrum to expand its footprint. In August this year, another telecom behemoth, AT&T, paid $25 billion to Echostar for spectrum. The frenetic M&A (Mergers and Acquisitions) activity in telecom has heated up, and these are only the recent examples.
In May this year, AT&T announced a plan to pay Lumen Technologies $5.75 billion to acquire its fibre-Internet business. Around the same time, the US telecom regulator, FCC (Federal Communications Commission), granted a formal approval to the $20-billion acquisition by Verizon of Frontier Communications. Amidst all this, Charter Communications announced that it was paying $34.5 billion to acquire Cox Communications and, in the bargain, become the largest cable services company in the United States.
In a nutshell, the American telecom deals in the past few months tot up to more than $80 billion. They signify consolidation of existing services and consumers, as also the ability to offer extra non-telecom services. But if one looks closely, some of the deals are largely about enhancing connectivity, or the acquisition of (wireless) spectrum and fibre optics (physical infrastructure). Most companies seem to realise that the costs to get fresh spectrum, or lay new fibre, are high.
In fact, since the pandemic, global telecom deals have seen an upswing. They totalled more than $100 billion each in 2020, 2021 ($150 billion) and 2024. In the first half of 2025, the value crossed $60 billion. The US market witnessed the largest ones. In the first half of 2025, it accounted for 90 per cent of the deals. In 2020 and 2021, it accounted for the largest percentages.
According to an analysis, some of the new trends include: Surging deal values (top five of the 35 in the first half of this year represented more than 80 per cent of total value), acquisitions to gain scale (Charter-Cox and AT&T-Lumen) or exit non-core areas (Telefonica’s sale of global assets), and scale-deals accounting for more than 40 per cent of values over the past five years. While telecom firms hope to utilise M&As to “add new capabilities, and evolve their businesses for the next era,” there is a feeling that “in the biggest industry reset since deregulation, the integrated Telco is giving way to more disaggregated, narrowly-focussed business models.”
There are 330 million Internet subscribers and 400 million mobile phone subscribers in the United States. The numbers may appear small compared to the situation in China and India, both of which have billion-plus users. But the US is a developed economy, and the charges for data and mobile service are considerably higher. Analysts estimate that the American market generates more than $500 billion revenues each year. With this new wave of M&As that massive pie will now be shared by only a handful of companies.
This has prompted analysts to worry about the impact on the consumers. The US is already an expensive market, as stated earlier. One GB of data costs about $6 on an average, compared to a miniscule $0.20 in India. Hence, there is a concern that consolidation may take the American industry back to the days when Ma Bell or the original AT&T enjoyed a near-monopoly in telecom.
In those days, several activists and muckraking journalists prodded a series of antitrust actions, which led to Ma Bell being splintered into seven entities in 1982-83. In addition, the ‘sinful’ seven were forced to compete with each other. Like in the pre-1980s era, the ongoing accumulation of spectrum, fibre and subscribers in the 2020s may leave the people at the mercy of service providers.
In June this year, analyst Sean Gonsalves wrote: “Of course, AT&T’s monopoly was eventually broken up in 1982. Now, nearly 50 years later, in what feels like our new Gilded Age, it probably shouldn’t surprise us that the spirit of Vail has returned with a vengeance…. When big telecom giants consolidate, especially in a market where most people have only one or maybe two Internet service providers to choose from, the results are predictable: Without meaningful competition for something as fundamental as Internet connectivity in an Internet-connected world, monopolists have no incentive to improve service, invest in network upgrades, or compete on price.”
Technically, StarLink is a new player in the market that theoretically enhances competition in the marketplace. But its services are expensive. The United States is a peculiar market compared to India. In the latter, both the mobile telephony and broadband Internet segments are dominated by the two behemoths, Reliance Jio and Airtel, with the state-owned BSNL offering meek competition, and a third player, Vodafone Idea!, on the verge of bankruptcy. The number of players in America is higher. Rather than national, there is a regional divide. In most regions, only one or two companies dominate. Like India’s national market, the US’ regional markets behave like duopolies or oligopolies.
There can be little doubt that consolidation is usually bad news for consumers. In the twenty-first century, the American and European markets witnessed a wave of M&As in the pharmaceutical industry, which resulted in just a handful of giants like Johnson & Johnson, Merck, Pfizer and Astra Zenca dominating the market. In Europe, the regulators keep a hawk-like eye on predatory pricing. But this was not the case in America, where healthcare today is expensive, and medicines, especially life-saving ones are grossly overpriced.
