Sprint formally opposes AT&T's purchase of T-Mobile [Updated]
Sprint Nextel Corp. formally announced its opposition to AT&T Inc.'s proposed $39-billion purchase of T-Mobile USA Inc., urging regulators to block the huge telecommunications deal.
If the deal goes through, Sprint, the nation's fourth-largest wireless carrier, would find itself a distant third, behind Verizon Wireless and a much larger AT&T.
Sprint had been a rumored suitor for T-Mobile. With the AT&T deal, however, analysts speculate that Sprint would be ripe for takeover or be forced to acquire smaller wireless providers to try to remain competitive.
But AT&T's purchase must be approved by federal regulators for it to go through. And Sprint said Monday that should not happen.
"Sprint urges the United States government to block this anti-competitive acquisition," said Vonya McCann, the company's senior vice president for government affairs. "This transaction will harm consumers and harm competition at a time when this country can least afford it."
Regulators are expected to give the deal tough scrutiny. And key lawmakers have promised hearings; some of them, along with consumer advocates, have raised concerns that the deal could raise prices for wireless subscribers and reduce competition.
Sprint argued that it can compete "in a truly dynamic marketplace" but that AT&T's purchase would reverse years of actions by the federal government and the courts to make the U.S. telecommunications market more competitive.
Raising the specter of a return to AT&T's one-time dominance of the traditional land-line phone business, McCann said, "Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly."
[Updated at 1:03 p.m.: AT&T responded that if it buys T-Mobile, the wireless market will remain competitive and the company will improve its quality of service and its customers' ability to get next-generation service, "spurring innovation and economic growth."
"The U.S. wireless market is intensely competitive, with five or more competitors in 18 of the top 20 markets," AT&T said.]
-- Jim Puzzanghera
Photo: A Kyocera Corp. Echo smart phone that uses Sprint's service. Credit: Bloomberg