During CTIA 2011 in Orlando, Florida last week, Sprint CEO Dan Hesse really showed his colors by taking solid jabs at each of the other carriers during a CEO round table moderated by Jim Cramer. And during Sprint’s unveiling of the EVO 3D, Hesse quipped that the other carriers have “faux-G” rather than actual 4G. It was pretty hilarious. But Sprint also made it clear that the other big news, AT&T’s acquisition of T-Mobile, was not good for the industry and consumers.
This time around, Sprint is making it official: it is openly opposed to the proposed acquisition. Of course, the deal could still take a year before it’s approved by regulators, but the FCC has been far too kind to the wireless carriers. It’s not beyond imagination that the deal may go through and we’ll be stuck with two gigantic carriers, potentially leaving us with few options, and Sprint in a distant third place.
Sprint says, “AT&T and Verizon are already by far the largest wireless providers. If approved, the proposed acquisition would create a combined company that would be almost three times the size of Sprint in terms of wireless revenue and would entrench AT&T’s and Verizon’s duopoly control over the wireless market.”
There will be no real competition in the wireless space. Anyone who contends that U.S. Cellular, Cricket, MetroPCS and others comprise the competition is kidding themselves.
OVERLAND PARK, Kan. (BUSINESS WIRE), March 28, 2011 – Sprint Nextel [NYSE:S], the nation’s third largest wireless provider and a leader in advanced wireless broadband technologies, announced today its opposition to AT&T’s proposed $39 billion takeover of T-Mobile USA.
The transaction, which requires the approval of the Department of Justice and the Federal Communications Commission, and will likely spark a host of hearings in the U.S. Congress, would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition. The wireless industry has sparked unprecedented levels of competition, innovation, job creation and investment for the American economy, all of which could be undone by this transaction.
AT&T and Verizon are already by far the largest wireless providers. If approved, the proposed acquisition would create a combined company that would be almost three times the size of Sprint in terms of wireless revenue and would entrench AT&T’s and Verizon’s duopoly control over the wireless market. The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated companies with unprecedented control over the U.S. wireless post-paid market, as well as the availability and price of key inputs, such as backhaul and access needed by other wireless companies to compete.
“Sprint urges the United States government to block this anti-competitive acquisition,” said Vonya McCann, senior vice president, Government Affairs. “This transaction will harm consumers and harm competition at a time when this country can least afford it. As the first national carrier to roll out 4G services and handsets and the carrier that brought simple unlimited pricing to the marketplace, Sprint stands ready to compete in a truly dynamic marketplace. So on behalf of our customers, our industry and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly.”
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 49.9 million customers at the end of 2010 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Newsweek ranked Sprint No. 6 in its 2010 Green Rankings, listing it as one of the nation’s greenest companies, the highest of any telecommunications company.