Sprint Officials Denounce Duopoly by Possible AT&T Takeover of T-Mobile

By Erin Harrison March 29, 2011

Claiming the transaction would reduce competition and create a “duopoly” of the wireless industry, Sprint officials this week vocalized concerns over AT&T’s possible $39 billion takeover of T-Mobile USA.

Sprint officials released a statement on March 28, which said the acquisition could spark Congressional hearings, and undo the competitive nature of the wireless industry.

“The transaction, which requires the approval of the Department of Justice and the Federal Communications Commission, and will likely spark a host of hearings in the U.S. Congress, 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. 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.”

Sprint Nextel is the third largest wireless provider, following industry icons Verizon and AT&T. As the LA Times reported, if approved by regulators, the newly expanded AT&T. would have 130 million subscribers, allowing it to “leapfrog arch-rival Verizon Wireless and its 94 million customers to become by far the nation's largest wireless carrier. Sprint Nextel Corp. would be a distant third.”

Sprint officials said that AT&T and Verizon are already the largest wireless providers, and a takeover of T-Mobile by AT&T would create a “duopoly” over the wireless market.

“If approved, the proposed acquisition would create a combined company that would be almost three times the size of Sprint in terms of wireless revenue and would entrench AT&T’s and Verizon’s duopoly control over the wireless market,” the statement by Sprint continued. “The wireless industry moving forward would be dominated overwhelmingly by two vertically integrated 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.”

Vonya McCann, senior vice president of government affairs at Sprint, said the company urges the U.S. government to block the so-called anti-competitive acquisition.

“This transaction will harm consumers and harm competition at a time when this country can least afford it. As the first national carrier to roll out 4G services and handsets and the carrier that brought simple unlimited pricing to the marketplace, Sprint stands ready to compete in a truly dynamic marketplace,” McCann said. “So on behalf of our customers, our industry and our 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.”

Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Janice McDuffee

Executive Editor, Strategic Initiatives

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