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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: Too late for Sprint
By cerx on 6/28/2011 5:38:30 PM , Rating: 2
We can have a duopoly in soft drinks because it is a lot easier for a drink company to pop up (7-up, Dr. Pepper, etc.) than a new cell provider. If we fall to 2 providers, with all the upfront costs of securing spectrum and building towers we'll never be able to add a 3rd.


RE: Too late for Sprint
By Etsp on 6/28/2011 10:13:07 PM , Rating: 2
That doesn't make any sense. Duopolies and Monopolies naturally occur BECAUSE of the high barrier to entry, not in spite of it. Intel and AMD as an example, Nvidia and AMD (because they bought ATI) as another.


RE: Too late for Sprint
By sorry dog on 6/29/2011 9:06:18 AM , Rating: 2
The difference between processors and cell service is how often does the average person go processor shopping? Once every couple of years whereas wireless providers are ongoing and a much greater part of our lives. I don't recall ever having to give my social to AMD or Intel. But when it comes down to two then it will be much easier for those two to get together on policies that will make it easier for them to do business...without regard for our privacy and consumer rights...and then we only have the government to protect us...and that's working so well right now.

...and anyway it's quite arguable that the processor duopoly has stagnated processor innovation quite a bit at times...


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