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Sprint CEO Dan Hesse
Hesse feels he is fighting for Sprint's survival and the industry

The 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 Verizon."

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.

Many 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 buyout.



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RE: Meh...
By sorry dog on 6/28/2011 3:03:12 PM , Rating: 3
MAYBE there would be a short/medium term benefit to ATT/T Mobile customers, but there is a very definate downside to all consumers long term.

A duopoly for wireless will not be a good thing, and that's what will happen. In fact, a commonly used tool the Herfindahl index shows an non-competitive market by the FTC own guidelines. So I don't see how the FTC should not be objecting to this merger... oh wait ... there's congressional oversight... never mind ... I'm sure they will protect the interests of the people...


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