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Can Sprint win over regulators in AT&T, T-Mobile merger?

Sprint has frequently been the underdog in the wireless industry and bargain pricing, early moves to 4G and improving customer service have been its weapons of choice. Now it better hire a few lobbyists if it wants to derail the AT&T-T-Mobile merger.

Sprint has frequently been the underdog in the wireless industry and bargain pricing, early moves to 4G and improving customer service have been its weapons of choice.

When the new week kicks off Sprint may want to employ a few lobbyist and lawyer types. Sprint is faced with an uphill battle as AT&T on Sunday moved to buy T-Mobile from Deutsche Telekom for $39 billion. Now the company has three options:

  • Fight to derail a merger that will make it a distant No. 3.
  • Watch AT&T and T-Mobile become the largest wireless carrier and play in a landscape dominated by two companies (Verizon Wireless is the other).
  • Break up a deal and somehow merge with T-Mobile (at a minimum of $39 billion).

For now, Sprint is going with Door No. 1. In a statement, Sprint spokesman John Taylor said:

The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the communications industry. AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor. If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US 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. The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely and by this dramatic change in the structure of the industry.

It's hard to argue with Sprint's take. AT&T and T-Mobile would change the dynamics in the industry. AT&T is arguing that bigger is better and the beefed up company can bring mobile broadband to more of the country.

Look for this back-and-forth to continue for a while.

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