Sprint Fights Back Against AT&T Takeover of T-Mobile
Not surprisingly, Sprint has released a statement that it plans to fight AT&T's proposed $39 billion takeover of T-Mobile USA. The takeover would create the biggest wireless carrier in the nation, and along with current industry leader Verizon, would represent "a new Ma Bell duopoly," Sprint said, with a combined market share of 70 percent.
AT&T announced last week that it is acquiring T-Mobile USA from Germany-based Deutsche Telekom AG for $39 billion in cash and stock. AT&T, currently the second-largest wireless company, hopes to attract some of T-Mobile's 34 million customers to its network.
For a while, many had believed that Sprint was the obvious choice to acquire T-Mobile as a part of Sprint's effort to beef up its network, and after all this merger would have been a wise joining of the third and fourth-place carriers against an already mighty top two.
In response to the news, Sprint said on Monday (Mar. 28) that it would "fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly."
Ma Bell is a phrase used to describe the American Telephone and Telegraph company, which had a monopoly over telephone service in the U.S. until 1984.
The AT&T transaction, which requires the approval of the Department of Justice and the Federal Communications Commission (FCC), is expected to spark a host of hearings in the U.S. Congress.
"AT&T and Verizon are already by far the largest wireless providers," Sprint said. "If approved [by the FCC], 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 deal will harm consumers and harm competition at a time when this country can least afford it."
However, according to Mark Beccue, a senior analyst at ABI Research, the FCC will not be looking at earnings but market share instead.
"Sprint noted that the combined revenue would be three times the size of their company," Beccue told TechNewsDaily. "However, the FCC is going to look at subscribers when it comes to competition and holding market share."
Beccue noted that Sprint's referencing of Ma Bell was an effort to "sow fear."