Sprint CEO planning 'nukes' to block AT&T, T-Mobile merger
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.?
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.?
Comments
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
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***!
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.
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.
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.
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.
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
Really? What makes it illegal? It wouldn't form a monopoly, not with VZW still out there...
You certainly live up to your username.
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.
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.
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.
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...
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.
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.
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.
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.