Editor in Chief
Sprint Releases Strong Response to AT&T/T-Mobile Merger
A surprising plot-twist in the story of smartphone carriers just developed. Previously, we reported that a merger between Sprint and T-mobile was in the works. Unfortunately, it turns out that AT&T will probably buy-out T-Mobile for $39 Billion instead.
A Sprint merger with T-Mobile would have been a good thing for the industry. It would have made the two carriers that were tied for third place in the industry actually powerful enough to be competitive with AT&T and Verizon. This competition would have been great for consumers as it would have kept prices down and customer service up amongst all the carriers. An AT&T and T-Mobile merger would eventually do the opposite.
Needless to say, Sprint was not too happy about this merger and issued a strong response with in an official press release. Here's what they had to say,
There is truth in their words. Ultimately, I hope the FCC and the DOJ shoot down this merger between AT&T and T-Mobile. A combined AT&T/T-Mobile would be powerful enough that they could virtually ignore Sprint, leaving them 'eating scraps'. This would leave just Verizon and the new AT&T in the position of dominating their customers eventually. It seems that in the long run, it will be rather 'anti-competitive' and reduce choice and customer service for consumers. What do you think?
"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, Sprint said in a statement. 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.
03-21-2011 12:33 PM