Sprint’s Official Opposition To ATT & T-Mobile Merger

Posted on Mar 28 2011 - 6:50pm by Kyle

A few weeks ago it was widely rumored that Sprint was in talks to merge with T-Mobile. Combining the 3rd and 4th largest wireless carrier in the United States may have made sense to some but we knew this wasn’t the case. Although financially it made sense, technologically it didn’t.

Although Sprint’s CEO Dan Hesse, poked fun at AT&T’s Ralph De La Vega during the CEO round table panel at CTIA, Sprint made it public today that they totally oppose the merger of AT&T and T-Mobile. We’re going to stay away from the snarky comments found on sites like Android Community, because unlike Android Community we knew that the Sprint T-Mobile rumor was false and didn’t headline it just to get page views.  As a result, comments like “Sprint are sore losers” aren’t necessary here.

Sprint announced today that they oppose the AT&T T-Mobile merger because it would form a duopoly in the wireless space with AT&T and Verizon Wireless holding all the cards.  In addition to AT&T tripling the size of Sprint with the acquisition, with two major players, vendors to wireless companies would be able to hike prices of equipment necessary for Sprint’s survival out of their reach.

Sprint also feels that a merger of this kind would drive prices up for rate plans which wouldn’t be good for consumers.

More after the break

“Sprint urges the United States government to block this anti-competitive acquisition,” said Vonya McCann, senior vice president, Government Affairs. “This transaction will harm consumers and harm competition at a time when this country can least afford it. As the first national carrier to roll out 4G services and handsets and the carrier that brought simple unlimited pricing to the marketplace, Sprint stands ready to compete in a truly dynamic marketplace. So on behalf of our customers, our industry and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly.”

Sprint will most likely get to speak before the Federal Communications Commission, the Department of Congress and possibly Congressional leaders.

The FCC has often promoted competition in their governing space however it’s important to note that they also approved federal deregulation of commercial radio stations which led to the demise of smaller companies in lieu of 3 giant companies. The FCC has said they won’t rubber stamp this acquisition, but we’re not so sure Sprint will find an ally at the commission.

With the current state of the economy the government regulators may find it easier to approve AT&T’s acquisition of T-Mobile rather than see T-Mobile go bankrupt, pull out of the United States or find another smaller suitor.

Source: Sprint

Here is the entire press release:

Sprint Opposes Proposed AT&T Acquisition of T-Mobile USA

Transaction would reduce competition and harm consumers

OVERLAND PARK, Kan. (BUSINESS WIRE), March 28, 2011 – Sprint Nextel [NYSE:S], the nation’s third largest wireless provider and a leader in advanced wireless broadband technologies, announced today its opposition to AT&T’s proposed $39 billion takeover of T-Mobile USA.

The transaction, which requires the approval of the Department of Justice and the Federal Communications Commission, and will likely spark a host of hearings in the U.S. Congress, would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition. The wireless industry has sparked unprecedented levels of competition, innovation, job creation and investment for the American economy, all of which could be undone by this transaction.

AT&T and Verizon are already by far the largest wireless providers. If approved, the proposed acquisition would create a combined company that would be almost three times the size of Sprint in terms of wireless revenue and would entrench AT&T’s and Verizon’s duopoly control over the wireless market. The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated companies with unprecedented control over the U.S. wireless post-paid market, as well as the availability and price of key inputs, such as backhaul and access needed by other wireless companies to compete.

“Sprint urges the United States government to block this anti-competitive acquisition,” said Vonya McCann, senior vice president, Government Affairs. “This transaction will harm consumers and harm competition at a time when this country can least afford it. As the first national carrier to roll out 4G services and handsets and the carrier that brought simple unlimited pricing to the marketplace, Sprint stands ready to compete in a truly dynamic marketplace. So on behalf of our customers, our industry and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly.”

About Sprint Nextel

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 49.9 million customers at the end of 2010 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Newsweek ranked Sprint No. 6 in its 2010 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company. You can learn more and visit Sprint atwww.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.

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