The AT&T/T-Mobile merger is currently undergoing the government regulatory process. The proposed purchase of T-Mobile by AT&T for $39Billion dollars needs to be approved by the FCC and the Department of Justice.
The FCC has been collecting information from all the parties involved or affected by the proposed meger. Sprint has of course been the most vocal opponent to the merger. Although things seemed tense in Orlando Florida when Sprint’s Dan Hesse and AT&T’s Ralph DeLa Vega sat on a panel together moderated by Jim Cramer, things really heated up as soon as the Sprint folks got back home to Kansas.
More after the break
Hesse has voiced his concerns that AT&T doesn’t really have the spectrum crunch that they are citing as the reason for the merger. Prior to AT&T’s announcement about T-Mobile they had closed with Qualcomm to purchase $1.9 billion dollars worth of spectrum from their failed “Flo TV” Venture. Hesse contends that AT&T should have enough spectrum that they’ve been warehousing to build out their network.
AT&T announced in January at CES that they were doing “4G” in two parts. The first part is HSPA+ technology, the same technology T-Mobile brands as “4G”. They are also launching a 4G/LTE network similar to that of top competitor Verizon Wireless. It’s presumed that they need more spectrum to build out a competitive 4G/LTE network against Verizon.
Sprint basically calls BS in regards to this notion from AT&T.
Sprint’s opposition to the merger has resulted in 9 states subpoenaing all of Sprint’s information regarding the proposed merger. Attorney Generals in Arizona, Florida, Hawaii, Illinois, Minnesota, New York , Pennsylvania, Texas and Washington State are looking to get all the information from Sprint before deciding on whether or not to support the merger. Although the FCC and Department of Justice are the only agencies that need to initially approve the merger, state governments can file antitrust lawsuits in their states which would hold up the merger.
Sprint also contends that the merger will create a duopoly and that with two major carriers Verizon and AT&T, prices for infrastructure technology will be driven up to where Sprint will no longer be able to compete.
If the merger gets approved we at TDG speculate that the influx of customers who abandon AT&T/T-Mobile will actually head to Sprint, so although they strongly oppose the merger, they will gain more customers.