Sprint CEO planning 'nukes' to block AT&T, T-Mobile merger

Posted:
in General Discussion edited January 2014
Sprint CEO Dan Hesse said in an interview that he plans to launch "nukes" in his fight to stop AT&T's proposed acquisition of T-Mobile USA.



Hesse offered Bloomberg's Greg Bensinger a rare glimpse into the "White Room" where he plans his offensive against AT&T, using the room's nearly wall-to-wall whiteboards to "map out "nukes" in red, blue and green ink."



In addition to Sprint's resources, the CEO has invested his own personal resources in stopping AT&T. His strategy has included lobbying Congress, courting technology CEOs to speak out against the deal and convincing state regulators to examine the acquisition. And, according to the interview, Hesse has "other tactics" up his sleeve.



AT&T announced in March that it had reached an agreement to purchase T-Mobile USA from parent company Deutsche Telekom for $39 billion. The deal has quickly come under federal scrutiny, with the U.S. Senate, Department of Justice and Federal Communications Commission all getting involved.



In May, Sprint filed a formal petition with the FCC objecting to the merger. AT&T responded by claiming the deal would have no effect on the competitive landscape.



For Hesse, the deal represents a life-or-death situation for Sprint. During a Senate hearing last month, senators asked him what Sprint's likelihood of survival would be if the proposed merger took place. "My position is that it would more difficult for Sprint to compete," he replied. "This would be a duopoly, and it would put Sprint to be acquired."



Hesse believes he's fighting not just for Sprint's survival but for the good of the industry and American consumers. ?The industry just won?t be as innovative and as dynamic as it has been,? he said during the interview. ?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.?



However, AT&T maintains that the merger would help the wireless operator to operating more efficiently, cut costs, and thereby benefit customers. ?Their arguments about prices going up just defy economic logic,? said AT&T General Counsel Wayne Watts. ?We?ve had wireless transactions multiple times over the last ten years and prices have gone one direction: they?ve gone down.?



According to the report, the executive has enlisted "lobbyists, consulting groups, two former U.S. House Judiciary Committee counsels and lawyers at Skadden, Arps, Slate, Meagher & Flom LLP." Regardless, he may find himself outgunned, as AT&T outspent Sprint in Washington by more than 12-to-1. In 2009 and 2010, AT&T contributed $3.26 million to federal candidates, while Sprint donated just $257,500.



Interestingly enough, Hesse spent 23 years at AT&T, and ran the company's wireless business for three years before leaving in 2000. He insists, however, that his campaign against the deal isn't personal.



Analysts have voiced concerns over Sprint's long-term post-merger chances. ?If the deal goes through, Sprint remains the No. 3 player in the industry; their ability to ever become an AT&T is shut off forever,? said Credit Suisse AG analyst Jonathan Chaplin, who expects the merger will be approved.



However, Hesse remains optimistic. ?An underdog is not thinking about the point spread; they?re thinking about winning the game,? he said. ?We can win this.?
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Comments

  • Reply 1 of 73
    alienzedalienzed Posts: 393member
    crap... ww3
  • Reply 2 of 73
    irontedironted Posts: 129member
    Give a knockout punch to Randall Stevenson.
  • Reply 3 of 73
    bwikbwik Posts: 562member
    In many fields... airlines, banking, cable TV, cell phones... the govt has basically abdicated its anti-monopoly role. The laws are there, they just never get enforced anymore. If I worked for DOJ I could prove a bunch of different ways that an ATT/Tmobile merger is illegal.
  • Reply 4 of 73
    dimwitdimwit Posts: 29member
    Quote:
    Originally Posted by bwik View Post


    In many fields... airlines, banking, cable TV, cell phones... the govt has basically abdicated its anti-monopoly role. The laws are there, they just never get enforced anymore. If I worked for DOJ I could prove a bunch of different ways that an ATT/Tmobile merger is illegal.



    Really? What makes it illegal? It wouldn't form a monopoly, not with VZW still out there... Unless you think that being the only carrier supporting CDMA constitutes a monopoly, although that would be like saying that nintendo has a monopoly because they make the only system that supports Wii games. Or that Republicans have a monopoly because the Democrats can't string together logical thoughts... Or daring fireball has a monopoly because Gruber only writes for them... Or, you get the point.



    If you have Tmo, and don't like AT&T, you will still have choices, off the top of my head there's:

    1. Verizon

    2. Sprint

    3. Cricket

    4. US Cellular

    5. Metro PCS

    you might not like any of those choices, but you do have them.



    Sincerely,

    Dim
  • Reply 5 of 73
    jr_bjr_b Posts: 64member
    Let AT&T merge with T Mobile. Let the consumers decide the fate of AT&T and Sprint. Frankly, AT&T's service area stinks and Sprint's customer service stinks.
  • Reply 6 of 73
    maccherrymaccherry Posts: 924member
    What a little girl!!!

    He says that the merger would harm Sprint. Screw Sprint. All them greedy mofos are about to robbed the consumer with this ridiculous thing called DOWNLOAD CAPS.Some have already started.

    Personally I'm getting sick and tired of this whole cell wars ting. iSO, android, windows mobile etc. I'm through with this sh***!
  • Reply 7 of 73
    benicebenice Posts: 382member
    The industry just won’t be as innovative and as dynamic as it has been



    Considering its far from the most dynamic or innovative telco market in the world there is lots of room for improvement from that position. That improvement comes about from an intensive process of the companies working to win and service new and existing customers.
  • Reply 8 of 73
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by bwik View Post


    In many fields... airlines, banking, cable TV, cell phones... the govt has basically abdicated its anti-monopoly role. The laws are there, they just never get enforced anymore. If I worked for DOJ I could prove a bunch of different ways that an ATT/Tmobile merger is illegal.



    I'll say it until I'm blue in the face... The US wireless customers got raped the moment exclusive access was granted to specific spectrum.



    The solution that seems to be better around the world is to auction the global standard frequencies to a few carriers, and as a bonus make carrier-locking phones illegal.



    AT&T getting the 2G and 3G GSM standard frequencies has given them a lot of advantages due to availability of handsets, common global network infrastructure, etc... iPhone notwithstanding.



    Sprint's 4G commitment to WiMax is a big boo boo unfortunately, since LTE will be the primary 4G choice for phone manufacturers, and again LTE carriers will benefit from economies of scale with most of the world going with LTE. How many WiMax smartphones are out there? And as another poster pointed out, Sprint has hinted or more or less conceded WiMax was the wrong play.



    In any case Sprint is just waiting to be acquired. Conspiracy theorists would say Hesse is doing all he can to get a sweet deal for himself when the buyout happens. Or I could be wrong, maybe this Hesse guy is a loyal and upstanding believer in Sprint, competition, what's best for customers, and the American way.
  • Reply 9 of 73
    hudson1hudson1 Posts: 800member
    Anyone else find Dan Hesse's arguments rather odd? Normally, CEOs are ecstatic over the number of significant competitors shrinking from three to two. So why isn't Hesse ecstatic? Maybe he's afraid AT&T will do the one thing he claims they won't -- offer a better overall product to consumers via improved quality or lower prices. If AT&T does what he says they will do, give consumers a worse product, that would only incentivize consumers to more readily choose Sprint.



    Let's remember, Hesse's duty is to look out for Sprint shareholders first and his employees second. If he's responding based on that duty then it tells me he's afraid a bigger AT&T will become a better choice for consumers.
  • Reply 10 of 73
    boeyc15boeyc15 Posts: 986member
    Quote:
    Originally Posted by Hudson1 View Post


    Anyone else find Dan Hesse's arguments rather odd? Normally, CEOs are ecstatic over the number of significant competitors shrinking from three to two. So why isn't Hesse ecstatic? Maybe he's afraid AT&T will do the one thing he claims they won't -- offer a better overall product to consumers via improved quality or lower prices. If AT&T does what he says they will do, give consumers a worse product, that would only incentivize consumers to more readily choose Sprint.



    Let's remember, Hesse's duty is to look out for Sprint shareholders first and his employees second. If he's responding based on that duty then it tells me he's afraid a bigger AT&T will become a better choice for consumers.



    Or they(sprizon) can use their market POWER (think darth fader voice) to manipulate. Market POWER is good for consumers until the competition is forced to leave. IMO, duopoly, monopoly, not a large difference except the definition in law.
  • Reply 11 of 73
    dbtincdbtinc Posts: 134member
    Quote:
    Originally Posted by bwik View Post


    In many fields... airlines, banking, cable TV, cell phones... the govt has basically abdicated its anti-monopoly role. The laws are there, they just never get enforced anymore. If I worked for DOJ I could prove a bunch of different ways that an ATT/Tmobile merger is illegal.



    Run for the HIlls - Ma Bell is back. Say no to this merger from Hell.

    http://forums.appleinsider.com/image...ies/1oyvey.gif
  • Reply 12 of 73
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by Dimwit View Post


    Really? What makes it illegal? It wouldn't form a monopoly, not with VZW still out there...



    You certainly live up to your username.



    Quote:
    Originally Posted by maccherry View Post


    What a little girl!!!

    He says that the merger would harm Sprint. Screw Sprint. All them greedy mofos are about to robbed the consumer with this ridiculous thing called DOWNLOAD CAPS.Some have already started.

    Personally I'm getting sick and tired of this whole cell wars ting. iSO, android, windows mobile etc. I'm through with this sh***!



    Uh, Sprint's the only one without any download caps on its plans. Every single other company has them. Maybe before you explode, you should be intelligent enough to have a reason to do so.
  • Reply 13 of 73
    anantksundaramanantksundaram Posts: 19,152member
    Quote:
    Originally Posted by dbtinc View Post


    Run for the HIlls - Ma Bell is back.



    Frankly, the US had the world's best -- and most reasonably priced -- phone service that was the envy of the world, and funded the world's greatest research in the private sector (Bell Labs) when Ma Bell was Ma Bell.



    I long for the days.
  • Reply 14 of 73
    jexusjexus Posts: 373member
    Quote:
    Originally Posted by Tallest Skil View Post


    Uh, Sprint's the only one without any download caps on its plans. Every single other company has them. Maybe before you explode, you should be intelligent enough to have a reason to do so.



    I believe what he was trying to describe(and failed in doing), was the UPLOAD not download caps, that Sprint had previously injected into it's Wimax phones at 1.5/mb's a sec I believe.



    Not sure if sprint still has them on or not.
  • Reply 15 of 73
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by Jexus View Post


    I believe what he was trying to describe(and failed in doing), was the UPLOAD not download caps, that Sprint had previously injected into it's Wimax phones at 1.5/mb's a sec I believe.



    Well.



    THAT'S interesting, though. Capped upload speeds...
  • Reply 16 of 73
    So basically Dan is going to spend uber $$ on lawsuits/lawyers/suits and "nukes" instead of new technology/upgrades. Yeah, THAT'S the way to win 'em over Dannyboy. Bankrupt Sprint...... :-/ GO FOR IT.
  • Reply 17 of 73
    jexusjexus Posts: 373member
    Quote:
    Originally Posted by Tallest Skil View Post


    Well.



    THAT'S interesting, though. Capped upload speeds...



    Like I said, IDK if it's still in effect via increase, or not in effect at all.



    I guess it won't matter much since Sprint is going trough divorce court with clearwire anywho.
  • Reply 18 of 73
    chabigchabig Posts: 624member
    Quote:
    Originally Posted by Tallest Skil View Post


    Uh, Sprint's the only one without any download caps on its plans. Every single other company has them. Maybe before you explode, you should be intelligent enough to have a reason to do so.



    This isn't the place for personal insults. Stop that.



    That said, I know AT&T doesn't have download caps, and I don't think the others do either. At AT&T you pay for the data you use, but you can use as much as you want without limit.
  • Reply 19 of 73
    The Sprint CEO should be more worried about their poor performance than what his competitors are doing. If he has done his job then his product would be better (better product at a better price) and if that has been accomplished, then he needs to make sure that the market knows.



    Sprint has been a complete failure in the mobile industry from the standpoint of gaining any traction and getting new customers. Frankly, that lays squarely at the feet of the CEO.



    If I owned stock in Sprint I would be worried for a multitude of reasons, not the least of which is the fact that the CEO seems to be completely distracted by what his competition is doing. That company needs to look inward and figure out how be successful instead of worrying about changes in their competition.
  • Reply 20 of 73
    Quote:
    Originally Posted by benice View Post


    The industry just won?t be as innovative and as dynamic as it has been



    Considering its far from the most dynamic or innovative telco market in the world there is lots of room for improvement from that position. That improvement comes about from an intensive process of the companies working to win and service new and existing customers.



    I am curious what you would be comparing this to? There has not been significant innovation by the carriers for over a decade or more. All improvements are/have been incremental, not innovations. Your idea of improvement has faltered badly and doesn't reflect the reality of the carrier market for cellular services. There is no intensive process of these companies working to win and service new and existing customers. As the carriers struggle to fight commoditization of their wireless pipes, the era of service innovation has passed them by. They had the opportunity to become bona fide service providers, but squandered that in the race to consolidate and gobble up regionals. They have relied on the handset makers to develop hardware that would entice users to bounce from their current competitor to their service set.
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