Sprint Chimes In On AT&Tmo Acquisition

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Sprint and T-Mobile were the two smaller mid-sized “major” telecommunications providers in the United States. The two companies were both trying to gain marketshare against the gigantic AT&T and Verizon. With AT&T buying T-Mobile, what’s Sprint to think now that they’re the smallest major carrier and will be surely overshadowed by the empires of AT&T and Verizon? As you can imagine, Sprint isn’t happy about it and they warn the US Government to carefully examine the so called “AT&Tmo” deal.

In a statement, Sprint said the following:

The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the communications industry. AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor. If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US 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. The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely and by this dramatic change in the structure of the industry.

As I wrote about previously today, AT&T is already out courting the Department of Justice, Federal Communications Commission and Federal Trade Commission. They’ve got a website up - mobilizeeverything.com – which has entire pages dedicated to talking about how fierce the wireless industry is in the United States and how they won’t be dominating anything by buying T-Mobile.

As we know from the Google and Microsoft antitrust investigations – employees from other companies will be interviewed. That means that Sprint execs will be called before the government and put under oath and asked what effects they think the AT&T-Tmo acquisition will have on the industry. Even though AT&T believes there is enough competition in the US wireless scene to make the acquisition legal, I suspect that Sprint, Leap Wireless and the “super regionals” like Cellular South, MetroPCS and US Cellular will all be telling the US government to stop the deal.

That being said – AT&T has shareholders and a board of directors. You don’t just make a $39 billion offer if you think it’ll get stopped by the government. AT&T has done their due diligence on the deal and think it can get through the US regulatory approval process.

Do you think the AT&T-T-Mobile deal is bad for the consumer and for the other wireless companies? Tell us what you think in the comments section.