Sprint doing everything it can to stop AT&T's T-Mobile acquisition

By on June 29, 2011, 10:30 AM

Sprint Nextel CEO Dan Hesse is still hard at work outlying tactics to stop AT&T's proposed takeover of T-Mobile USA. Hesse has already tripled the amount of time he's spending on government affairs, testifying before Congress and making regular trips to Washington. He's also courting top technology CEOs to come out against the deal and sway public opinion, working to get as many as 18 state regulators to scrutinize the purchase, and strategizing other tactics he's not ready to disclose.

Sprint is organizing industry opposition and recently filed a 377-page dissent with the Federal Communications Commission (FCC). The company's own engineers even made a point to show AT&T how to get more capacity from its wireless network so it wouldn't need to buy T-Mobile.

"Clearly, purely, we want to win and block the merger," Hesse told Bloomberg during an interview at the company's Overland Park, Kansas headquarters. "This one poses real risks."

Last week, AT&T declared that it was still on track to have its acquisition of T-Mobile approved by March 2012. AT&T General Counsel Wayne Watts said the company provided a second round of information requested by the Justice Department and that meetings with the FCC were also going as scheduled.

AT&T has reportedly promised to give Deutsche Telekom $6 billion in assets, services, and cash as a break-up fee if US regulators reject the deal. The $6 billion would include $3 billion of cash, about $2 billion worth of spectrum, and a roaming agreement valued at $1 billion.

Three months ago, AT&T announced that it had entered into a definitive agreement to acquire T-Mobile from Deutsche Telekom in a cash-and-stock transaction valued at approximately $39 billion. The acquisition of T-Mobile, the fourth largest carrier in the US, would enable AT&T, currently the second largest US mobile service, to leapfrog the leader of the US market, Verizon Wireless, a venture of Verizon Communications and Vodafone Group.

Furthermore, AT&T and Verizon Wireless would hold 79 percent of the US market if regulators approved the deal, leaving Sprint as an even weaker number three player in the US. Unsurprisingly, it is doing everything in its power to appeal the huge deal.




User Comments: 7

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example1013 said:

Wow, 79 percent? That's bullshit. I can't see how the FCC could ever think of letting this happen. Wireless services aren't even regional monopolies like cable or electricity, so I fail to see how allowing 2 companies to control so much could be anything but bad news, especially when one of them is pretty much the shadiest major wireless operator in the United States (AT&T), and has a history of screwing over customers.

Anyone remember how they planned on charging $100 and a monthly fee for a device to boost wireless signals at home and such because their network sucks balls?

gwailo247, TechSpot Chancellor, said:

Yeah, this is bad news for consumers. Among many people I know, T-mobile was their refuge from the other major carriers, and T-mobile always seemed to offer better deals than others.

If this goes through, I might have to start boycotting watching Bayern Munich.

Muggs said:

I have been debating switching to sprint for just the principle of the matter and I am starting to really hate Verizon's new policies. A duopoly is as bad as a monopoly in this instance since they will easily price fix the market and screw consumers

Guest said:

FCC is on the take...

When i heard this, I thought.. ATT&T stole people money and over sold it's bandwidth... and never put any revenue back into it's backbone & infrastructure.

When 4g started comming into prominance, and other carriers 3G nearly twice as fast as AT&T's 3g.. they knew they had to re-wire their whole network and invest in the next 10 years.

Instead.. they bribe a FCC board member and just buy out T-Mobile who HAS been vigiliant in expending it's networks capabilities.

Without this deal, by next year AT&T would be bankrupt, because they have no future.. they needs to spend billions on their network.

Guest said:

Which is a good point..^^

Because then AT&T would be up for sale and torn apart & showcased as to how CEO's work the stock value & focus on share holders, instead of the viability of the company. They artificial infalte their stock, reap massive perks for doing so, then herald himself as a genius.

When the rest of the world understand that he doesn't care people are getting dropped calls constantly, or that their service is not providing what they agreed to the customer. The CEOs don't care about how they look, or how they step over their customers, ONLY if they can lock them into a contract, they can complain all they want.

They did and then AT&T had to falso make commercials talking about the coverage of 3G, then slip in 4G in the end, to make "average joe television watcher" that AT&T has full coverage.

MilwaukeeMike said:

Muggs said:

I have been debating switching to sprint for just the principle of the matter and I am starting to really hate Verizon's new policies. A duopoly is as bad as a monopoly in this instance since they will easily price fix the market and screw consumers

Because Intel and AMD have fixed prices and screwed the consumers on CPUs. Almost as bad as AMD and Nvidia have done it with GPUs, right? Not that it matters, because unless Verizon evaporates there will be 3. And the big 4 only make up 83% of the market anyway.

gwailo, We don't know that this will be bad for consumers in general. Fewer competing companies doesn't necessarily mean higher prices or poorer service. It is probably bad news for AT&T and Tmobile customers though. Mergers are very hard to pull off correctly, especially if the companies are big. With an acquitision one company is in charge and calls the shots, with a merger there's a lot of 'let's do it my way' arguing and it weakens the entire company as a whole. No matter what, there is a lot of growing pain, and Sprint and Verizon acutally have an opportunity to steal some customers if this happens.

AT&T may need network upgrades, but I dont' think they're going to break up and disappear. Mobile is only 40% of their revenue, which is a lot, but it's not like they're going to go under without it.

gwailo247, TechSpot Chancellor, said:

milwaukeemike said:

gwailo, We don't know that this will be bad for consumers in general. Fewer competing companies doesn't necessarily mean higher prices or poorer service. It is probably bad news for AT&T and Tmobile customers though. Mergers are very hard to pull off correctly, especially if the companies are big. With an acquitision one company is in charge and calls the shots, with a merger there's a lot of 'let's do it my way' arguing and it weakens the entire company as a whole. No matter what, there is a lot of growing pain, and Sprint and Verizon acutally have an opportunity to steal some customers if this happens.

In the long run, less competition is bad for customers. Sure, they'll probably throw a few bucks here and there to give the masses a bone, but eventually it will mean higher prices, etc. Look at all the price fixing scandals from electronics to grain between ostensible "competitors". In situations like this I think its better to be wary rather than trusting.

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