ATandT, Verizon, Sprint: Down to the Big Three in This March Madness

With AT&T looking to buy T-Mobile, and Verizon and Sprint scrambling to react, business and IT execs need to pay attention as these carriers become cloud providers. It's now down to three choices on which to bet your business.

And then there were three. Three carriers that is: AT&T, Verizon and-in the rearview mirror-Sprint Nextel.

If the worry among the upcoming CTIA show organizers and PR community was that all the news had already been delivered at the Mobile World Congress, AT&T erased that worry March 20 by announcing a $39 billion deal to acquire T-Mobile. I was reading the news while Jet Blueing down to Orlando, Fla., for the annual CTIA event, which is dominated by the major carriers. While the proposed deal will bear some regulatory scrutiny, business and tech execs need to be developing a strategy now for a world where there are only three pipes to carry their company's mobile applications.

The rise of the mobile Internet has already touched off a scramble on the application side and the smart device side of the equation, but aside from persistent grumbles about monthly connection costs and dropped calls, there has been too little thought about the carrier in the middle of the equation. With the worlds of WiFi and wide-area networks constantly evolving, and with the possible entrance of new wireless players (remember when Google was thought ready to build out a wireless network?), if you are a company business exec, CIO or technology exec, you are going to have to bet your infrastructure on one of the big three in the near-term-like in the next five years, at most.

So, what should you do? Start by thinking about more than simply monthly connection costs and enterprise bundles you can buy. First, figuring out those bundles would stress out IBM's Watson supercomputer. The bundles are confusing because flat rates lead to price wars. Also, in the long run, arguing bundle price is shortsighted when you would be far better off starting to look at the infrastructure services the carriers are wrapping around their pipes.

OK, right, I know they are not pipes, but even the carriers know they need to capture all those cloud computing services that are so much in the news if they want to start locking in businesses. Without that lock-in, the mobile Internet would become a world of churn. If all those cloud vendors were tuned into what was going on, the EMCs, Amazons, Microsofts and Googles of the world would start to realize their biggest competitors will be the carriers rather than the old vendors putting on a new cloud outfit.

The carriers would like to become security, application, 24/7, always-on cloud infrastructure providers. They have a long way to go. However, it is not too early for potential customers to start sorting out the offerings from the soon-to-be Big Three. Can you start to move those really onerous tasks-let's start with security and patching-to the carrier? What about your plans to use a host for standard and new business applications? The carrier should be part of that consideration.

For consumers, the proposed acquisition is a whole different matter. Consumers judge carriers by call quality, dropped calls and speed-wait, come to think of it, those things are important in the business world also. AT&T-often portrayed as the Rodney Dangerfield of telecom-has a lot to gain by the acquisition. Both AT&T and T-Mobile operate on GSM and would get additional capability and spectrum without the big capital investment. Those capital dollars could be aimed at a faster 4G rollout.

The bigger risk is that the Big Three could quickly become the Big Two, as Sprint, with only 50 million subscribers as compared to the AT&T and Verizon combination of 230 million subscribers, is eclipsed. The Big Two could offer coverage and smartphone deals that Sprint would have a tough time to match.

Once, not all that long ago, there was one big phone company known as Ma Bell (AT&T), which was expected to be erased as phone competition was opened up and cellular technology left the wired providers tied to homes and payphones. Surprise, surprise, that didn't happen, and this return of Ma Bell is well worth understanding for the business-to-business community.