Sprint officially announced their opposition to AT&T’s proposed takeover of T-Mobile USA in a news release posted to Sprint’s Website Monday. The announcement cites the “duopoly control over the wireless market” that the company foresees should the merger be approved by the U.S. Department of Justice (DoJ) and Federal Communications Commission (FCC). In Sprint’s words:
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 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.
Dan Hesse, Sprint CEO
Sprint, the third largest wireless carrier in the U.S., had been in talks to buy T-Mobile themselves before AT&T snapped the nation’s No. 4 carrier up in a $39 billion takeover. A Sprint/T-Mo deal would have created a combined company that, while still No. 3 in the U.S. in terms of subscriber base, could likely have competed on a more even playing field with Verizon and AT&T, the current number one and two. Instead, if the AT&T/T-Mobile merger is approved, AT&T and Verizon will control a combined 70% of the US market and Sprint a mere 16%, leaving them in a very distant third place position, likely stripping them of almost all ability to compete in the post-paid market in a meaningful way. Lacking scale on par with AT&T and VZW, Sprint will have a very tough time negotiating with handset makers, building out network infrastructure, and otherwise remaining competitive on a national scale.
More or less backed into a corner by AT&T’s deep pockets, Sprint’s vowed to fight the merger the only way they can: They’re taking their case to City Hall. Or, to the DoJ and FCC, anyway. Sprint’s SVP for Government Affairs, Vonya McCann, was quoted by The Wall Street Journal as saying everything from, “We will take this show on the road,” to “This transaction will harm consumers … at a time when this country can least afford it,” to “We will talk to anybody who will listen.” Fighting words for sure, with more than a hint of desperation mixed in.
But it is desperation time for Sprint. A merged AT&T-Mobile would yield a subscriber base triple the size of Sprint’s own, and Verizon has already gone on record saying they’re neither interested in blocking the merger nor acquiring Sprint. The deal will likely take up to a full year to be approved or rejected by the Feds. That gives Dan Hesse and his troops sometime to mount a Pro-Competition, Anti-AT&T campaign to get the merger struck down in Washington.