Sprint Plans to Fight ATandT Bid for T-Mobile
Sprint has said it will fight AT&T's proposed acquisition of competitor T-Mobile. Should the deal go through, however, analysts say it could benefit Sprint.Sprint has come out publically against AT&T's proposed $39 billion acquisition of T-Mobile. Verizon Wireless is the nation's largest carrier, followed by AT&T, Sprint and T-Mobile. If AT&T gets regulatory clearance to purchase the number-four player, it "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," Sprint argued in a March 28 statement. "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."
If the Department of Justice and the Federal Communications Commission were to approve the deal - a process that analysts estimate could take up to a year - it could create a carrier almost three times Sprint's size, in terms of wireless revenue. The consequence of this, Sprint says, would be a wireless industry dominated by two 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."
"We believe any markets AT&T is required to divest would likely be sold at a discount," states the note. "For reference, in the 2009 Verizon/Alltel transaction, Verizon divested 2.3 [million] subscribers at roughly half the valuation that it paid for the rest of Alltel." Metro PCS, the nation's fifth-largest carrier, could potentially also be interested. It declined, however, a request for comment. Yin added in his note, "We believe Verizon and Sprint would both benefit from the removal of a major competitor in the market, while Sprint should additionally benefit from potentially picking up significant parts of T-Mobile divested by AT&T."
Nonetheless, Sprint's McCann said in the statement, on behalf of customers, the industry and the 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."