Sprint Poised for Battle to Block ATandT, T-Mobile Deal

By CIOinsight  |  Posted 03-29-2011 Print Email
Sprint has thrown down the gauntlet and publicly come out against the proposed $39 billion sale of T-Mobile to rival AT&T.

Sprint has come out publically against AT&T's proposed $39 billion acquisition of T-Mobile.

Verizon Wireless is the nation's largest carrier, followed by AT&T, Sprint and T-Mobile. If AT&T gets regulatory clearance to purchase the number-four player, it "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," Sprint argued in a March 28 statement. "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."

If the Department of Justice and the Federal Communications Commission were to approve the deal -- a process that analysts estimate could take up to a year -- it could create a carrier almost three times Sprint's size, in terms of wireless revenue. The consequence of this, Sprint says, would be a wireless industry dominated by two companies with "unprecedented control over the U.S. wireless post-paid market, as well as the availability and price of key inputs, such as backhaul and access needed by other wireless companies to compete."

"Sprint urges the United States government to block this anti-competitive acquisition," Vonya McCann, Sprint's senior vice president of government affairs, said in the statement. "This transaction will harm consumers and harm competition at a time when this country can least afford it."

Not everyone believes Sprint will fare so poorly, should the deal be approved.

Citadel Securities analyst Shing Yin, in a March 28 research note, reiterated his position that AT&T, at the insistence of federal regulators, is likely prepared to agree to significant divestitures -- selling off portions of T-Mobile, instead of keeping it all for itself -- in order to make the deal happen.

For more, read the eWEEK article: Sprint Plans to Fight ATandT Bid for T-Mobile.


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