ORLANDO, Fla.--Verizon Wireless (NYSE:VZ) has no interest in a deal to acquire Sprint Nextel (NYSE:S) in the wake of AT&T's (NYSE:T) proposed $39 billion merger with T-Mobile USA, the carrier's CEO said.
Verizon Wireless CEO Dan Mead said that despite the potentially seismic changes the wireless industry could face if AT&T does get the deal to go through, he did not feel compelled to snap up Sprint, the nation's No. 3 carrier. He also said that he would not oppose the AT&T/T-Mobile deal.
"We're not interested in Sprint. We don't need them," Mead told Reuters ahead of the start of the CTIA Wireless 2011 trade show, where the deal is the talk of the town. Mead said he thought the deal would go through as long as AT&T made certain concessions; the company is expected to have to divest spectrum and some overlapping markets.
"Anything can go through if you make enough concessions," Mead said.
Sprint's shares slumped 14 percent in trading Monday as news of the announcement sunk in. Analysts said that the company, which had been rumored to be in talks with T-Mobile parent Deutsche Telekom over a deal for T-Mobile, was left in a decidedly weaker position.
"A Sprint deal is now off the table, and Sprint is left to go it alone," Sanford C. Bernstein Analyst Craig Moffett wrote in a research note.
Analysts began speculating that the AT&T/T-Mobile deal could herald a Verizon-Sprint deal.
"The question is whether the regulators believe they can stifle the continued market progress towards a duopoly, whether this deal occurs or not, and more importantly whether this has a negative impact on the consumer experience," Phil Marshall, an analyst at Tolaga Research, told FierceWireless. "Also, if the deal does go ahead, does it mean the Verizon would have a legitimate case to purchase Sprint sometime in the future?"
Sprint has spoken out against the deal, and said in a statement that if approved, the wireless industry will be "dominated overwhelmingly by two vertically-integrated companies that control almost 80 percent of the U.S. wireless postpaid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete. The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely by this dramatic change in the structure of the industry."
For more:
- see this Reuters article
- see this Bloomberg article
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