Sprint Nextel (NYSE:S) CEO Dan Hesse used the company's annual shareholder meeting to once again blast AT&T's (NYSE:T) proposed $39 billion purchase of T-Mobile USA, essentially offering a preview of his congressional testimony. However, the Sprint chief was also pressed by shareholders about the carrier's backup plan if the deal does get approved.
Hesse repeated many of the claims he has made since the proposed acquisition was announced March 20. He said the deal, if approved, will stifle competition and innovation in the wireless industry and lead to a "duopoly" with Verizon Wireless (NYSE:VZ) and AT&T.
However, Hesse didn't offer much insight into Sprint's strategy to address the market if the transaction is approved. "Are you able to say what your realistic hope for a best-case scenario would be?" Rob Stitt, a Lee's Summit shareholder, asked Hesse. "It seems unlikely that the government's going to just squelch the merger completely. They're tending the other direction."
Hesse said Sprint has considered the possibility, but that the company is working to stop the deal. He also said the company is not interested in any concessions AT&T might be forced to make. "I would agree with you that the stock market largely believes this deal will go through," Hesse said. "But we believe we can beat it, and we're going to focus on beating it because long term we think this is very bad for this industry."
Sprint has hired new lobbying firms to in recent months to press its case against the deal to members of Congress and federal regulators. The company also is mounting a campaign against the deal with state regulators. The FCC and the Department of Justice must sign off on the deal.
Hesse was asked about allegations that Sprint officials had told members of Congress that if the deal goes through, Sprint will be put out of business. The Sprint chief said he was not aware of anyone from Sprint making such comments. "I don't think we'd go far as saying we'd be out of business, but there'd be long-term more negatives than positives," he said.
For more:
- see this Kansas City Business Journal article
- see this Kansas City Star article
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