The problem with the T-Mobile/ATT merger was that it would have concentrated a lot of customers and eliminated a national carrier. Frankly, allowing Verizon to buy the CableCo AWS spectrum was a mistake as well. Competition works well when carriers are closer in strength to each other.

But LTE seems to handle traffic well. Verizon has 50% of its data traffic flowing over a 10x10 LTE deployment.

In terms of T-Mobile, they will be launching 10x10 LTE just like Verizon and AT&T have and, via the MetroPCS merger, will even be able to launch 20x20 LTE in many top markets in the future. In some ways, T-Mobile will have the nicest spectrum position with 50MHz of AWS in NY, LA, Detroit, Boston, SanFran, etc. It's also important to look at spectrum per customer. AT&T averages 97MHz, but has more than double the customers of the combined T-Mo/Metro while that's only 28% more spectrum - ~150% more customers with ~30% more spectrum. A similar case can be made with Verizon. With 50MHz, it should be easy enough to get a 10x10 LTE deployment out to match Verizon and AT&T on speed and capacity there.

Now, Verizon will likely augment in the coming years with a second 10x10 LTE deployment in the AWS band with the CableCo spectrum. But T-Mobile will likely be able to get 20x20 LTE at AWS in many areas. A lot of MetroPCS' customers are already VoLTE equipped and T-Mobile notes that they will likely be able to shut down CDMA in 2 years time.

To be frank, LTE holds up well. A 10x10 LTE deployment offers good speeds even as it starts taking the majority of data traffic in 20MHz. As traffic migrates away from PCS and cellular, there will be more spectrum for LTE. While data traffic is likely to continue to rise, I don't think it's unreasonable to believe that 40MHz could handle near 100% of the current data traffic for a giant like AT&T or Verizon. VoLTE will decrease the spectrum that voice communications are using.

One thing to note about the Verizon situation: yes, they got a new 20MHz chunk of unused spectrum and that's awesome for Verizon, but they only hold 12% more spectrum than AT&T and they have more customers to serve with it. As traffic on legacy networks drops off, I think we're going to see a lot of spectrum become available. The amount of data transferred over networks in the future will increase, but LTE Advanced is on the way and there's a lot of spectrum to be repurposed from UMTS and CDMA/EV-DO. It wasn't great that Verizon was allowed to open a nice spectrum advantage through their CableCo deal, but it's not as big as one would think at first glance.

In fact, the company in the worst position is Sprint. With 54MHz, they're around half AT&T and Verizon and going to be behind T-Mobile. However, if they get approval to buy out Clearwire that will change (even if Clearwire's spectrum offers a lot less range).

I'd be cautiously optimistic about the competitive environment. The T-Mo/Metro combination will give them a lot of contiguous AWS spectrum and given their low customer numbers and ability to push 20x20 LTE in many areas, they could end up with a great network for those in urban areas (especially if they hit 200M people covered by the end of 2013, which is their plan). Sprint may get approval for their Clearwire purchase giving them a lot of spectrum and the ability to move beyond their 5x5 LTE deployment currently in progress. Sprint also has SMR spectrum that they'll hopefully use to their advantage in creating more robust coverage. I'm not saying that Verizon and AT&T's days are over, but it's possible that we'll have better options from more competitors in the coming years.

EDIT: Also of note, AT&T has un-paired spectrum (download-only) that it got from Qualcomm. It's 6MHz across the country, but 12MHz in the Northeast Corridor and California. That's another 5 or 10MHz down and upload capacity usually isn't needed as much as download. While this spectrum isn't usable pre-LTE Advanced and its channel bonding, it's unclear that they would be using it now anyway - considering that Verizon hasn't lit up its AWS spectrum yet even as 50% of its traffic is over its 10x10 LTE network.

Anyway, AT&T does have less spectrum, but it does have a chunk of download-only spectrum which plays in its favor since we download more than we upload.