This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Telecoms Fight for Global Dominance

NEW YORK (TheStreet) -- Telephony has always had an international character.

From the time I began covering the field in the early 1980s there was a race to seize international markets with undersea cables and satellites.

As the Internet expanded, both AT&T (T) (then a long-distance company, now part of the former Southwestern Bell) and MCI (now part of Verizon Communications (VZ)) owned the key core Internet Service Providers, or ISPs -- their digital lines defined the international Internet market.

All this has changed radically in the 21st century.

The old landline cash cow was tapped dry. Enterprises from IBM (IBM) to Google (GOOG), which could fill lines with corporate and branded Internet traffic, picked up unused dark fiber to dominate the international backbones. The cash cows became wireless, serving the thin Internet clients known as smartphones with firehoses of bandwidth.

But since these devices tend to move around, and the best customers are those whose phones move around the most, 2012 has also seen the industry make the first moves toward a grand global consolidation.

Where the last decade was a story of local oligopolies, this decade will be about efforts to build global oligopolies that might take on the Internet core companies, like Google, on an even basis.

It may have been U.S. regulators who set this off.

After AT&T's effort to take over Deutsche Telekom's (DT) T-Mobile, America's fourth-largest carrier, for $39 billion, was rejected on anti-trust grounds, it became obvious that the only way to scale was geographically.

Thus the Germans turned around and bought America's number-five carrier, MetroPCS, as The Huffington Post reported in early October, even though the two companies used different technologies.

In retrospect, the T-Mobile move was the Fort Sumter in the new global telecom war.

Masayoshi Son, CEO of Softbank, who got into the mobile market through his 2007 takeover of Vodafone Japan, now that country's leading provider, as BGR notes, then launched his audacious $20 billion move to buy most of Sprint (S), a deal for which Reuters reports he's borrowing $23 billion.

By adding Clearwire (CLWR) to the mix -- Sprint owns a majority stake in Clearwire -- Son figures he has enough spectrum to compete head to head with Verizon Wireless, still 45%-owned by Vodafone (VOD), and Verizon. Softbank won a similar market competition in Japan.

But more important than the spectrum for Son is the idea that he will have a bigger global footprint, with operations spanning two continents.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,086.63 -26.91 -0.16%
S&P 500 1,987.01 +3.48 0.18%
NASDAQ 4,473.6970 +17.6810 0.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs