Sprint Nextel (NYSE:S) said it will formally oppose AT&T's (NYSE:T) proposed purchase of T-Mobile USA for $39 billion, setting up a battle between the No. 3 wireless carrier and its larger competitor over a deal that, if approved, will reshape the wireless industry. Importantly, Sprint said it will not accept the transaction under any circumstances.
"We think there are no conditions under which this is a positive thing for consumers or America," Larry Krevor, Sprint's vice president of government affairs, told FierceWireless.
Krevor said Sprint will attack the transaction via multiple fronts. He said Sprint will use congressional hearings to express its concerns about the deal, and also will lobby members of Congress separately. Formal hearings have not been scheduled, but the House Judiciary Committee has indicated it will hold a hearing on the deal. Sprint also will make its position known through filings with the FCC and the Department of Justice, the two agencies that have jurisdiction over the deal.
"As we said last week, we strongly believe that this transaction is good for AT&T customers and T-Mobile customers, and is very much in the public interest given the benefits it will bring to 95 percent of all Americans," Jim Cicconi, AT&T's senior executive vice president of legislative and external affairs, said in a statement. "With regard to Sprint's recent statements about our transaction, we have always found that the most constructive course is to focus on our own strategies for serving our customers and building our business rather than becoming distracted by challenging the business strategies of others."
Krevor said that if the deal is approved, 72 percent of the country's wireless subscribers and 76.4 percent of wireless revenue will go to AT&T and Verizon Wireless (NYSE:VZ). He also said that the deal would allow AT&T, with a combined 129.2 million subscribers, to gain leverage over handset makers and infrastructure providers.
"We have great respect for AT&T's ability as a wireless competitor and certainly as a player in the regulatory world," he said. "The facts are the facts. AT&T will make its best case, and at the end of the day regulators will look at the record and make the right decision on the merits."
Verizon Wireless CEO Dan Mead has said regulators likely will approve the deal, if enough concessions are made. Smaller competitors, including Clearwire (NASDAQ:CLWR) and LightSquared, have expressed strong reservations about the transaction.
The Rural Cellular Association, whose members include MetroPCS (NYSE:PCS), Cellular South and others, voiced its disapproval of the proposed transaction. "This announcement is not a good development for competitive carriers," RCA President Steve Berry said last week. "Rural America stands to be the most negatively impacted by approval of such a 'mega-merger' without significant conditions to ensure competitive forces are not eliminated as a result."
For more:
- see this release
- see this Washington Post article
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