Print 54 comment(s) - last by wolrah.. on Mar 30 at 5:00 PM

Urges U.S. government "to block this anti-competitive acquisition"

Opposition forces to AT&T's proposed acquisition of T-Mobile USA received a major supporter yesterday: Sprint Nextel. 

Sprint first commented on the blockbuster deal -- which would consolidate 80 percent of the country's wireless customers in just two companies -- in a moderate tone after the merger was initially announced. "The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely and by this dramatic change in the structure of the industry," Sprint said in a statement a little more than a week ago. 

But the rhetoric became more heated yesterday, when Sprint put out a press release announcing its official opposition to the AT&T/T-Mobile deal.

"The transaction ... 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 statement said. "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." 

Sprint went on to detail how the merger would result in a company "almost three times the size of Sprint," resulting in a de facto "duopoly" of the wireless industry by AT&T and Verizon. 

"Sprint urges the United States government to block this anti-competitive acquisition," Vonya McCann, senior vice president of government affairs for Sprint, said in the release. "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."

According to Reuters, a number of consumer and trade groups have also been critical of the deal. "This requires smaller competitors to negotiate agreements with these two telecom giants," Consumers Union told Reuters, while the public interest group Free Press called the deal a "train wreck."

The $39-billion AT&T/T-Mobile merger faces approval by the Department of Justice and the Federal Communications Commission and could take a year to pass. Analysts are predicting regulators to impose a number of conditions. Sprint was not happy about this either. "This transaction is fundamentally anti-competitive, and you can't fix that with merger conditions," Charles McKee, Sprint's vice president of government affairs, told Reuters. 

AT&T's argument is that there are five or more competitors in 18 of the top 20 wireless markets, meaning the merger would not be a threat to competition. But Sprint is lobbying regulators to review the merger on a national level, rather than the market-by-market approach that the DOJ typically takes when assessing competitiveness in mergers. 

The private equity firm Robert W. Baird & Co. raised expectations for AT&T stock to "outperform," saying it was confident the merger will be approved. Expectations for Leap Wireless and MetroPCS were also raised to "outperform" because the merger would put pressure on Verizon or Sprint to acquire smaller regional wireless carriers.

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By Targon on 3/29/2011 10:10:02 AM , Rating: 2
Sprint has been bleeding money and customers for a long time now, and can't handle the idea that without T-mobile, they WILL be seen as the worst of the national cellular service providers when it comes to coverage area. So, if Sprint can't buy T-mobile due to not having enough money, then no one else should either, right?

When a company faces going out of business, the best hope is a merger/buyout, not just for the owners, but also for the customers. T-mobile customers may not be happy with the idea of AT&T buying the company, but the danger would be that the parent company just liquidates the assets and the business goes away. Look at the economy for the past two years, and look at how many businesses have closed their doors. T-mobile and Sprint are looking at that as a big possibility.

So, what does Sprint really offer that is better than the competition, other than good customer service and lower bills? Coverage area around the country? No. Faster data transfer speeds? Nope, not there either. How about selection of phones? Nope. Sprint itself is in a position where it could potentially be bought if it can't get the balance sheet looking better. If AT&T increases service quality, that isn't good for Sprint, but is that worse for customers or the industry?

By dryloch on 3/29/2011 6:40:25 PM , Rating: 2
That's a good one. I am in Atlanta in a section where there are tons of office buildings and the coverage on ATT is terrible. We could not make calls from our corporate office. We went to Sprint and now have full bars in the office. Sprint also benefits from being able to roam on Verizon Towers.

By goku on 3/30/2011 12:04:03 AM , Rating: 1
Doubtful. I mean yes you probably have zero bars, but you're also probably trying to use the 3G network, try the edge/gprs network and you'll probably have full bars in that area with AT&T. Reason for this is too many users on 3G, so while theoretically there is coverage there, it's being used up by all the customers and so there is nothing left. Reason you have good signal with sprint is because they have far fewer customers than AT&T and so there is more signal to go around. People ask why we didn't have 3G when Japan had it over 6 years ago, this is the reason why...demand for the service outstrips supply.

I only write this post because to me, you make it seem like ATT doesn't have coverage in that area at all, at any time of day. Bet you'd have 3G coverage at 2-4am in that area. Perhaps too many assholes with an iPhone.

By InfinityzeN on 3/30/2011 11:08:06 AM , Rating: 2
Far fewer? What multiple are you working with. Are we talking 1000 Sprint and 1910 AT&T? That is the rough difference between them. The problem isn't AT&T having more customers, but that they massively under invested in upgrading their network.

By wolrah on 3/30/2011 5:00:54 PM , Rating: 2
Sprint and Verizon have reciprocal roaming agreements, so their coverage as seen by a user is identical. The only difference is you tend to lose 3G data and drop back to 1xRTT speeds when roaming.

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