biggest wireless announcement of the year was AT&T's proposed purchase of
T-Mobile that would make it the largest carrier in the U.S. While the merger is
expected to get the green light by regulators, some in the industry think that
the merger is bad for the industry.
Sprint is working hard to get the merger blocked and is pulling out all of the
stops to accomplish its mission. Not only does Sprint think that its survival
is at stake, but the company wants everyone to believe that the purchase of
T-Mobile by AT&T will be disastrous for the industry and consumers. Sprint CEO Dan Hesse is working to find any way possible to block the purchase from
having Sprint's own engineers tell AT&T how it could increase its capacity
to hiring lobbyists and courting other CEO's to stand against the deal.
Many think that the only thing Sprint can hope for is to force the FCC and
other regulators to impose conditions on the purchase that would make it better
for Sprint. Sprint CEO Dan Hesse said, "Clearly, purely, we want to win
and block the merger. This one poses real risks."
The issue for Sprint as a company is that the merged AT&T/T-Mobile carrier
and Verizon could make
Sprint unable to compete for new devices and on price, ultimately
forcing the company out of business. Hesse has already admitted that Sprint's
survival as an independent is in doubt if the purchase goes through.
Hesse continues, "The industry just won’t be as innovative and as dynamic
as it has been. It’ll gum up the works when everything has to go through these
two big tollbooths, one that’s called AT&T and one that’s called
While Sprint and Hesse argue against the deal, AT&T says that the merger
would be better for consumers. The purchase would allow AT&T to make more
investments in networks and future technologies according to AT&T. AT&T
General Counsel Wayne Watts said, "Their arguments about prices going up
just defy economic logic. We’ve had wireless transactions multiple times over
the last ten years and prices have gone one direction: they’ve gone down."
Many note that while AT&T has promised it will use the purchase to improve
wireless broadband access, there is no way to force a company to stand up to
promises made. The only way to enforce promises would be for the Justice
Department to place conditions on the merger and if they conditions aren't met
AT&T could be taken to court.
believe that Sprint's concerns are being heard by the decision makers.
Whether or not they are enough to block the sale remains to be seen. The FCC
and Congress are
grilling AT&T on the purchase looking for any possible downside to the
quote: This is where Hesse retreats to map out “nukes” in red, blue and green ink, lately his tactics for stopping AT&T Inc. (T)’s proposed takeover of T-Mobile USA.