2. You're assuming that unlike Metro PCS, TMo has no "other benefits". Not sure if that's true. Personally, I prefer TMo because they offer decent service at a good price -- at least in my area. I also like that they're not evil -- they're not actively trying to squeeze every last penny out of customers like some of the others companies I dealt with. Certainly many other TMo customers must see some value in TMO and their offerings, otherwise they'd not be customers and TMo would not be as large as it is.
3. TMo is competition to the largest players -- in the markets where TMo operates. If I didn't have TMo available in my market I'd opt for something else -- probably Verizon. So at least as far as I am concerned, in this market TMo (small co) is competition to Verizon (large co). The fact that TMo does not compete in as many markets as some of the other guys does not mean they are less meaningful competition in the markets where they do operate.
Also, there are some contradictions in your post.. one paragraph states you don't want consolidation, but the one immediately after has you pondering how to consolidate TMo and ATT to improve ATT's service. Reading between the lines (I apologize if I'm misrepresenting your position) it seems you believe that ATT is the "worthy" competitor based on size. My opinion is that it doesn't have to be a game of giants at the expense of the small players. Small players can survive as well in niches. Metro PCS / TMo are examples.