Sprint officially opposing AT&T acquisition of T-Mobile
Wireless provider Sprint Nextel has formally declared its opposition to AT&T's proposed acquisition of T-Mobile, on the grounds that the deal will "harm consumers and harm competition."
Sprint, the third largest wireless carrier in the U.S., went on record against the $39 billion deal in a press release issued Monday. AT&T and T-Mobile parent company Deutsche Telekom announced the purchase earlier this month.
In its press release, Sprint argued that the acquisition "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."
The statement went on to point out that a combined AT&T and T-Mobile would be "almost three times the size" of Sprint in terms of wireless revenue, creating a Verizon and AT&T duopoly, which Sprint compared to the original U.S. telephone monopoly, dubbed "Ma Bell."
"The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated 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," the statement read.
"Sprint urges the United States government to block this anti-competitive acquisition," said Vonya McCann, senior vice president, Government Affairs. "This transaction will harm consumers and harm competition at a time when this country can least afford it."
Last week, Sprint executives spoke out informally against the acquisition, expressing concerns over how the deal would affect pricing and costs for the company. "If this transaction goes through you?re talking 79 percent, or roughly 80 percent of the market controlled by two companies. I think that?s a little too much?too much concentration," Sprint CEO Dan Hesse told CNBC's Jim Cramer.
Federal approval for the deal is expected to take at least a year. T-Mobile posted a FAQ to its website, noting that the carrier "remains an independent company" while the FCC and Department of Justice review the deal, and, as such, does not yet offer Apple's iPhone.
The Wall Street Journal reported last week that an anonymous official at the Federal Communications Commission expects FCC approval of the deal to be "a steep climb to say the least."
Sprint, the third largest wireless carrier in the U.S., went on record against the $39 billion deal in a press release issued Monday. AT&T and T-Mobile parent company Deutsche Telekom announced the purchase earlier this month.
In its press release, Sprint argued that the acquisition "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."
The statement went on to point out that a combined AT&T and T-Mobile would be "almost three times the size" of Sprint in terms of wireless revenue, creating a Verizon and AT&T duopoly, which Sprint compared to the original U.S. telephone monopoly, dubbed "Ma Bell."
"The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated 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," the statement read.
"Sprint urges the United States government to block this anti-competitive acquisition," said Vonya McCann, senior vice president, Government Affairs. "This transaction will harm consumers and harm competition at a time when this country can least afford it."
Last week, Sprint executives spoke out informally against the acquisition, expressing concerns over how the deal would affect pricing and costs for the company. "If this transaction goes through you?re talking 79 percent, or roughly 80 percent of the market controlled by two companies. I think that?s a little too much?too much concentration," Sprint CEO Dan Hesse told CNBC's Jim Cramer.
Federal approval for the deal is expected to take at least a year. T-Mobile posted a FAQ to its website, noting that the carrier "remains an independent company" while the FCC and Department of Justice review the deal, and, as such, does not yet offer Apple's iPhone.
The Wall Street Journal reported last week that an anonymous official at the Federal Communications Commission expects FCC approval of the deal to be "a steep climb to say the least."
Comments
I?m opposed to this, too, but Sprint sounds like a bunch of whiny little babies.
You think they are whiny? Wait until you see another $50 increase in your monthly phone bill, then you will probably whine louder than them.
ATT stinks. if they get T-Mobile, they will have even more control over more people with their crappy service. Prices will go up, services will suffer even more, and we will all have one less option in TMobile, which, by the way, has been a less expensive option for people who can't afford ATT's terrible network.
Back in the day of the Ma Bells, the government broke them up because they thought they were getting too big (i.e. Monopoly). Now, years later, one of the pieces is now being accused (once again) of being too big.
If the merger does get approved, time will tell whether it was the right thing. Regardless, AT&T seems to be doing something right (morals, ethics aside) to be in a position again of being "too big". So as far as I'm concerned, Sprint is being a whiny crybaby and perhaps a bit hypocritical since they too would just love to be in the position that AT&T is in right now.
You think they are whiny? Wait until you see another $50 increase in your monthly phone bill, then you will probably whine louder than them.
Sprint and MCI provided long distance service, but they had to use AT&T's lines.
AT&T's landline service was excellent while they were a monopoly.
Back in the day of the Ma Bells, the government broke them up because they thought they were getting too big (i.e. Monopoly).
ATT stinks. if they get T-Mobile, they will have even more control over more people with their crappy service. Prices will go up, services will suffer even more, and we will all have one less option in TMobile, which, by the way, has been a less expensive option for people who can't afford ATT's terrible network.
Do you have T-Mobile's service?
If so, they thank-you.
If not, it's why they are for sale! Because even less expensive plans were not enough to stem loss of subscribers. Same goes for Sprint. I wonder if their unlimited everything plan, if it was successful, would they be opposed to the merger? They'd still be a distant third place in the national ranking of cell companies...
The merger of Nextel into Sprint was, at the time, good enough for them, but apparently not good enough to increase their size or retain the business they had.
It seems kinda hipo-critical to say that our system encourages companies to be successful - but hey watch out if you are too successful.
At what point does the economies of scale tip over into monopoly? I would think that if a single wireless company had a sufficiently large customer base - that would allow them to offer lower prices thanks to economies of scale - and would not necessarily lead to higher prices "just because we can" - sure I suppose you need at least two companies to let the market provide some protection from price gouging.
But if monopolies are such a bad thing - why do local governments still allow cable companies to have a monopoly? I suppose you could claim that satellite TV is a competitor (not really in my opinion) - but FIOS is apparently blocked - and DSL is no where near cable internet. In fact if memory serves - Time Warner did not move in to provide local cable service until they were guaranteed exclusivity. So I guess that's how you get around it - you claim that you need a minimum number of customer to invest in the infrastructure needed.
ATT stinks. if they get T-Mobile, they will have even more control over more people with their crappy service. Prices will go up, services will suffer even more, and we will all have one less option in TMobile, which, by the way, has been a less expensive option for people who can't afford ATT's terrible network.
i do not see what the problem is? I have used at&t for over 3 years in major metropolitan city, and it has vastly improved. I have used other smaller carriers and found their service is horrible while piggy-backing off verizon's network. One provider I literally had to stay within a mile or two of a major freeway to get service. It would only get sms from my home, and I had to leave the house to make a call.
Sprint should shut up and stop lying to its customers about 4G. That is their biggest selling point and it is a total sham.. it more like 3G+ or 3.1 G....not 4G. There is nothing in the next couple of years in terms of infrastructure that would allow nationwide 4G (100kb/s-1Gb/s) service to the US.
Japan and other smaller countries, like Great Britain, that are smaller than Texas can step up and should have true 4G service. We have hundreds of millions upon millions more square miles than those smaller countries so you can expect the cellular service is going to be harder to canvas. A hell of a lot of easier than relaying copper or fiber cable across the nation.
Sprint should shut up and stop lying to its customers about 4G. That is their biggest selling point and it is a total sham.. it more like 3G+ or 3.1 G....not 4G. There is nothing in the next couple of years in terms of infrastructure that would allow nationwide 4G (100kb/s-1Gb/s) service to the US.
Oh, but you're okay with AT&T and T-Mobile calling HSDPA+ "4G", then? Particularly when WiMAX can be faster than HSDPA+ will ever be.
A hell of a lot of easier than relaying copper or fiber cable across the nation.
We can't seem to do either, so that's not exactly a point in the telecoms' defense.
Poor Sprint once a loser always a loser.
Then, I started reading economics, and ended up getting so interested in it that I got a masters degree in the subject. Now, I'm vastly less worried about companies' ability to just charge more "because they can", and vastly more worried about the inevitability of Congress pandering for votes (from intelligent, well-meaning people just like the three-year-ago me) by opposing business decisions. Those business decisions may be, in actuality, good or bad for consumers in the end, but the competitors of att will run to congressmen to protect their own profits awful quickly.
As I've said elsewhere, "monopoly" is a sasquatch, rarely seen in the actual world, but talked about often. And the loudest sasquatch-believers are competitors of large and successful companies, seeking to stretch out their own companies' existence by the force of government, rather than finding a way to compete.
Should one be interested in learning something about the process, there are several great podcasts at econtalk.org, and Sowell has several eminently readable books, as well as a regular column. Read Basic Economics by Sowell. You'll worry a lot less about companies' supposed power over you, but that worry might be replaced by knowledge about the government's actual power over you.
. So as far as I'm concerned, Sprint is being a whiny crybaby and perhaps a bit hypocritical since they too would just love to be in the position that AT&T is in right now.
Very good point. They tried to buy T-Mobile and a lot of their talk about 'one less option' stands no matter who might buy it.
But also, look at the flip side. FCC rules put T-Mobile in a bad spot because they aren't allowed to use the proper bandwidth for 3G GSM. They have to stay on a different run which means that phones have to be made to work on T-Mobile and at the moment it is not cost effective to include the hardware for both. So just like with the SIM less CDMA you can't take your phone off T-Mobile. And if you have an iphone or other smart phone and you unlock it, you are stuck with EDGE or not using cell data at all. So in those realms you basically have no real choice.
In the end, perhaps what we really need is the government to step in and change up the laws. Let T-Mobile play on the full playground and not restrict them to the sandbox. Supposedly CDMA could work with a SIM if they wanted it to, legally force them to want to. Or how about all LTE phones must work with a SIM and must include both GSM and CDMA. Let us take our devices where we want.
Going with that, how about new laws making device costs required to be a separate line item on your item, with the prorating equal to exactly 1/numberofmonthsinthecontract and the ETF or 'early upgrade' is simply you paying the balance of that amount. And if you run into some extra cash at some point you are allowed to apply it to that balance with no penalty. This would also mean that those that have paid off their contract or get a no contract device don't have to pay that extra money. How about a nice government study on the real carrier costs for SMS/MMS. Lets get that down to more like unlimited for $5 a month. And so on. Customers are also getting screwed by carriers with these games but no one has done squat about it
As I've said elsewhere, "monopoly" is a sasquatch, rarely seen in the actual world, but talked about often.
It disturbs me to see someone who claims he got a Masters degree in Econ making this statement. But it isn't true and economists would be the first to know this and tell it. There are lots of monopolies all over the place. Prime example. Apple has a monopoly in the tablet market. Hands down, indisputable.
Now what is a 'sasquatch' perhaps is the illegal or abusive monopoly. A lot of folks scream that X, Y or Z is one, but it isn't. Mainly because they don't understand the definition of a market (Mac Computers NOT a market, personal computer system is) or they don't get that not all monopolies are abusive. Apple's clear monopoly of the tablet market came naturally. They released a product, it was popular. No one else released a product in said market to counter the ipad. Now that they are, the ipad is so well grounded that yeah it has 90%+ of the game and probably will for a little while. But Apple didn't play games to get there. There's no smoking gun of their contracts that say if you see components to Apple you can't to any other company or other nonsense. And Apple hasn't abused that strength,. No telling developers they can't port to other systems, no changing the rules so only Mac computers work with iOS stuff and so on.
Sprint is pissed because AT&T was negotiating with T-Mobile behind their backs and snapped it up before they knew what hit them.
Poor Sprint once a loser always a loser.
Always such mature, reflective and thoughtful commentary available on this site. When is your tenth birthday?