Sprint decides to throw in its own lawsuit just to keep things interesting in the AT&T/T-Mobile merger discussion

AT&T thought that everything was going to be smooth sailing for its $39 billion USD acquisition of T-Mobile from Deutsche Telekom AG. After all, how could the government deny "significant customer, shareowner and public benefits" and AT&T's quest to "better meet our customers’ current demands, build for the future and help achieve the President’s goals for a high-speed, wirelessly connected America."

Well, after reading through the proposal and all of the evidence laid out by AT&T, the Department of Justice filed a lawsuit to block the merger, with Deputy Attorney General James M. Cole stating, "The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services." 

AT&T was apparently blindsided by the move, exclaiming, "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."

Not surprisingly, Sprint is delighted with this recent turn of events, and today hopped onto the anti-"AT&T-Mobile" bandwagon with a lawsuit of its own.

“Sprint opposes AT&T’s proposed takeover of T-Mobile,” said Susan Z. Haller, Sprint's vice president of litigation. “With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.”

Sprint went on to add that the combined forces of AT&T and T-Mobile would:

  • Harm retail consumers and corporate customers by causing higher prices and less innovation.
  • Entrench the duopoly control of AT&T and Verizon, the two “Ma Bell” descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
  • Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.

For now, Sprint has the U.S. Government on its side, so things are decidedly looking in its favor. However, AT&T has a few tricks up its sleeve and may be willing to cede some ownership of T-Mobile to allow the merger to go through.

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