Monday Morning Sour Grapes from Sprint on AT&T, T-Mobile Merger

By Tracey E. Schelmetic March 21, 2011

In a case of Monday morning sour grapes, Sprint thinks the merger between AT&T and T-Mobile is a really bad idea.

For those of you who missed it, AT&T yesterday announced the purchase of T-Mobile for $39 billion from Deutsche Telekom. The combination of the nation’s No. 2 and No. 4 wireless companies will shuffle the card deck quite a bit. AT&T is now in the No. 1 slot (or will be, once the acquisition is complete), followed by former leader Verizon and, bringing up the rear, Sprint, according to Digital Trends.

So, why the sour grapes? If you've been paying attention, there were rumors earlier this month that Sprint was actually in talks with Deutsche Telekom to buy T-Mobile. That merger, between players Nos. 3 and 4 in the U.S. wireless market, would have increased Sprint's clout.

Instead, AT&T has now snatched up T-Mobile, leaving Sprint a distant third behind the other two companies. As you might imagine, this is not a welcome turn of events. Sprint has issued an official statement responding to the acquisition, laying out in rather succinct terms exactly why the joining of AT&T and T-Mobile may be bad for business, or, as Sprint puts it, “innovation and robust competition.”

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.

Come to think of it, Sprint may have a point. Federal regulators are going to have their work cut out for them in gauging whether or not this deal can be made.


Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Why Blockchain Could Be a Gamechanger

By: Paula Bernier    1/22/2018

Blockchain has become closely associated with the controversial topic of cryptocurrency. And that's fine because blockchain is an enabling technology …

Read More

Consumer Privacy in the Digital Era: Three Trends to Watch

By: Special Guest    1/18/2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on …

Read More

CES 2018: Terabit Fiber - Closer Than We Think

By: Doug Mohney    1/17/2018

One of the biggest challenges for 5G and last mile 10 Gig deployments is not raw data speeds, but middle mile and core networks. The wireless industry…

Read More

10 Benefits of Drone-Based Asset Inspections

By: Frank Segarra    1/15/2018

Although a new and emerging technology, (which is still evolving), in early 2018, most companies are not aware of the possible benefits they can achie…

Read More

VR Could Change Entertainment Forever

By: Special Guest    1/11/2018

VR could change everything from how we play video games to how we interact with our friends and family. VR has the power to change how we consume all …

Read More