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Monday March 28, 2011 4:01 pm

Sprint requests government to reject AT&T purchase of T-Mobile

Sprint reject att tmobile merger

Sprint on Monday formally objected to the merger of AT&T and T-Mobile, and called on the government to reject the deal because it would harm competition in the wireless space.

"Sprint urges the United States government to block this anti-competitive acquisition," Vonya McCann, senior vice president of government affairs at Sprint, said in a statement. "This transaction will harm consumers and harm competition at a time when this country can least afford it."

AT&T surprised the tech community last Sunday when it announced plans to acquire T-Mobile for $39 billion. AT&T argued that the purchase will help stop the spectrum crunch and spur the companies's deployment of 4G service.


"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 continued. "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."

AT&T disagreed with Sprint's assessment. "The U.S. wireless market is intensely competitive with five or more competitors in 18 of the top 20 markets," AT&T said in a statement. "The AT&T T-Mobile merger will improve quality for consumers, provide a near-term solution to spectrum exhaust, and expand the availability of LTE to 95 percent of Americans, spurring innovation and economic growth."

Sprint, however, said the market will "be dominated overwhelmingly by two vertically integrated companies with unprecedented control" over the wireless industry.

AT&T, Verizon, and Sprint executives faced off during a CEO panel at the CTIA Wireless trade show last week, during which Sprint chief Dan Hesse reiterated McCann's arguments.

"In my view, yes, I am concerned about it," Hesse said of the merger. "If you look at wireless subscribers and post-paid [users], today the big two have 67 percent market share. If [the deal] is allowed to proceed it would be 79 percent market share."

"I do have concerns that it would stifle innovation and that too much power would be in the hands of two," Hesse continued.

Verizon has not been as critical. The company has not released a formal statement about the merger, and during the CEO panel, Dan Mead, president and CEO of Verizon Wireless, said the company was "certainly very interested in what's going on, and we're going to be observers."

"We'll be watching what goes on here, there may be things market-by-market that are of interest, but we're very, very confident in our position," Mead said. "We're not going to get distracted by this."

Mead said Verizon had no interest in acquiring Sprint or T-Mobile.

The FCC and DOJ have not made formal statements about the merger, but members of Congress have pledged to take a close look at the deal.

This article, written by Chloe Albanesius, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.

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