Sprint CEO Dan Hesse told eWEEK that AT&T acquiring T-Mobile would be harmful to consumers and competition.
CEO Dan Hesse has a bone to pick with AT&T's proposed T-Mobile acquisition.
is just a bridge too far," Hesse told eWEEK after a June 16 speech at
Stanford University's Graduate School of Business as part of a CTO Forum.
"A takeover of T-Mobile by AT&T would be absolutely disastrous for
consumers and the U.S. economy. It would lead to less competition; as a result,
the marketplace would have a lot more regulation than we have now."
has argued for months that absorbing T-Mobile's infrastructure would help
extend 4G technology to more Americans, including those in rural areas. In
April, CEO Randall Stephenson insisted to USA Today that the wireless industry
would remain "fiercely competitive" even after his company finished
disagrees, countering that the acquisition would result in few tangible
benefits for consumers. AT&T "got big guffaws from all of us in the
industry when they said: 'Acquiring T-Mobile will help us build 4G in rural
areas,'" he added. "What the heck does that have to do with it?
They're already sitting on a ton of unused spectrum in rural areas, just like
all of us are."
forthrightness over what he sees as a competition-crushing acquisition is a bit
of a sea change from March of this year, when he appeared relatively quiet
about AT&T's freshly announced plans. During the executive roundtable that
opened this year's CTIA 2011 conference in Orlando, Fla., he told an audience,
"My opinion [about the deal] doesn't matter," while leaving the more
critical comments to Sprint's public relations team.
federal regulators continue to pore over the intricacies of AT&T's
acquisition, though, Hesse has been steadily ratcheting up the intensity of his
to Bloomberg, Sprint's CEO even has a whiteboard-filled "war
room" at the carrier's headquarters, a nerve center from which he
apparently plans to do everything in his power to help scuttle AT&T's
of course, has no choice but to react.
Hesse's facts are totally wrong in nearly every area. They've been refuted
thoroughly in the ample record compiled by the government in our merger,"
Jim Cicconi, AT&T's senior executive vice president of external and
legislative affairs, wrote in an emailed statement to eWEEK. "In fact, the
FCC's wireless competition report released just this week also contradicted a
number of the things Mr. Hesse says. Yet he keeps making the same wild
assertions as if repetition will somehow make them true."
then took things a step further: "We also can't help but feel that
Sprint's shareholders would be better served if Mr. Hesse focused on a strategy
for Sprint rather than continue a Queeg-like obsession with AT&T and its
Queeg, a main character of the Pulitzer Prize-winning novel The Caine Mutiny-played by Humphrey
Bogart in the 1954 film adaptation-has
a personality marked by paranoia and anger.)
Sprint does stand a chance of blowing a hole in AT&T's waterline, according
to some analysts. "Four or five years ago, rivals' lobbying wouldn't have
counted for much," stated Charles King, principal analyst of Pund-IT.
"But we're in a far more proactive regulatory environment under the Obama
administration than we were then." In light of that, "I think
regulators will be paying close attention to comments from various constituencies,
including competing vendors."
is a real issue with regulators these days. "All carriers lobby, so
everyone has a shot," according to Ray Wang, principal analyst and CEO of
Constellation Research Group. "Take data plans. The elimination of
unlimited data from Verizon to usage-based is proof that without competition
customers will pay a hefty price."
can only hope the anti-competition argument resonates with federal regulators.
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.