Sprint files suit to block ATT/T-Mobile merger

Sprint files suit to block ATT/T-Mobile merger

Summary: Sprint filed suit in federal court to block the ATT/T-Mobile on anti-trust grounds. The filing follow that of the DOJ last week to block the deal.

SHARE:
TOPICS: Telcos, Banking
5

Sprint filed a federal suit in Washington D.C. today to block the proposed merger between AT&T and T-Mobile. The suit follows one filed by the DOJ to block the merger on anti-competitive grounds. Sprint has been vocal against the merger since it was announced, and no doubt feels this is punctuation on the DOJ ruling.

The Sprint statement outlines the reasons it opposes the merger:

The proposed takeover would:

  • Harm retail consumers and corporate customers by causing higher prices and less innovation.
  • Entrench the duopoly control of AT&T and Verizon, the two "Ma Bell" descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
  • Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.

The suit names AT&T, AT&T Mobility, T-Mobile USA and Deutsche Telekom, the participants in the proposed $39 billion merger. With the deck stacking up higher against the merger as time passes, you might think AT&T would just walk away from the deal that is seemingly becoming more expensive. That's easier said than done as that move would cost AT&T $3 billion, as promised to the T-Mobile side should the deal fall through.

Topics: Telcos, Banking

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

5 comments
Log in or register to join the discussion
  • So then shouldn't Verizon be forced to divest?

    Since Verizon is so much larger than AT&T Mobile under this logic should they not be forced to divest at least a portion of their mobile service to "widen competitin"? The reality is economies of scale dictate you cannot make it in the mobile business if you only hold limited areas and do not have the full infrastructure in place. Once the RF hits the tower it is all backbone and heavy net from there. That is why the Germans want to bail out and will if they cannot compete.
    rplocica
    • As far as I know

      @rplocica --- Verizon didn't get where it is by buying up the competition.
      sackbut
      • RE: Sprint files suit to block ATT/T-Mobile merger

        @sackbut Actually, they did. I originally signed up with GTE for my wireless and got swallowed by Verizon.

        I have been happy enough to stay since, but they did buy up smaller carriers after "Ma Bell" broke up to become a big player.
        sbf95070
      • RE: Sprint files suit to block ATT/T-Mobile merger

        @sackbut

        Of COURSE it did. The best wireless company in my part of the country was far and away Alltel. I think V does a decent job but its network didn't make Alltel's better for me or my friends and they over ruled their own sales reps and dropped our Alltel services once those contracts were done.
        bainsmac
  • YES!

    Go Sprint!
    I'm glad they have the cajones to stand up to these bigger companies. I sell all these carriers and I would hate to lose one to make it a bigger company who could increase the prices because of less competition. It's the only thing that helps drives our sales.
    NickSteel