Sprint: If AT&T/T-Mobile Merger Goes Through It’s Going To Get Pretty Hard For Them To Maintain Pricing

Sprint’s President of Network Operations, Steve Elfman, just gave a very revealing interview to the Seattle Times. During the interview he talked candidly about the AT&T /T-Mobile merger and what it means for the wireless industry and for Sprint, the nations third largest carrier.  Elfman spoke about what happens it means if the merger doesn’t go through and also if it does.

Industry analysts, and journalists have been speculating all day about what happens now that the US Department of Justice has filed a lawsuit against the AT&T/T-Mobile merger citing fair competiton.

More after the break

In the interview Elfman speculates that T-Mobile won’t be able to survive on their own:

“I think T-Mobile will need to hook up or do as we do–partner with a Clearwire (NASDAQ:CLWR) or others, or LightSquared, as we have done,” Steve Elfman, president of Sprint’s network operations, said in an interview with the Seattle Times. “The smaller guys like us and them–and I know it seems odd to call ourselves small, but when you’re around the monopolists you’re quite small–you’ve got to do some creative things.” (source: Fierce)

AT&T continues to cite spectrum as one of the driving forces behind their merget with T-Mobile.  Elfman disputes that, telling the Seattle Times:

“Having more spectrum is a good thing. But having spectrum and using it is an important thing. These guys … they’ve got more spectrum in their warehouse than I’ve got and they’re not using it.” Elfman continued:

“But the need for more spectrum for all of us over time continues to be important because of data usage. We will all need more spectrum, but the argument that they needed T-Mobile to give them more spectrum to be able to serve rural [areas], that is totally bogus. Five years from now, they’ll probably need more spectrum. I would agree with that”

Finally in this Q&A interview with the Seattle Times’ Brier Dudley, Elfman spoke on what happens to Sprint’s competitive pricing if the AT&T T-Mobile merger goes through saying:

“Between the two of us, we kind of kept the market having reasonable prices, both value and low price. So I think that is another one that starts to go away and that will drive prices up. We will try our best to be the alternative, but when you’re only 15 percent share it’s going to get pretty hard for us.”

Many people in the industry thought the AT&T/T-Mobile wouldn’t have a hard time getting through the government regulatory process. In fact AT&T’s chief legal counsel said:

“We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated. “

No matter what way it goes it seems there are some big changes ahead in the US wireless industry.

Source: Fierce, Seattle Times, AT&T


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