Sprint concerned over AT&T’s T-Mobile USA acquisition; complains of antitrust risk

“Sprint Nextel Corp. is concerned that AT&T Inc.’s acquisition of T-Mobile USA will leave the U.S. telecommunications market dominated by two companies and hurt its ability to compete, a person familiar with the company’s thinking said Sunday,” Shayndi Raice reports or The Wall Street Journal.

Raice reports that Sprint “”has managed to stabilize declines in customers and revenue, but still doesn’t carry Apple Inc.’s iPhone and has much weaker profit margins than AT&T or Verizon.”

Read more in the full article here.

Electronista reports, “Sprint objected to the $39 billion deal and said it would “alter dramatically” the US cellular landscape. It would put too much power in the hands of AT&T and Verizon, making them gatekeepers for things such as backbones and roaming deals… Democratic Senator Jay Rockefeller stressed to the Department of Justice and the FCC that it was “absolutely essential” the deal be investigated. He added that the Commerce Committee would be involved.”

Read more in the full article here.

25 Comments

  1. Apple should buy Sprint. And release new products on their own network. Then they would own the entire customer experience – hardware, software and Internet connection.

  2. In short… Sprint is saying now how the heck are we going to not go under now that we are definitely the weakest link? And now the only carrier without an iPhone. If anything Verizon MAY buy Sprint, but I think they will wait it out a bit right before sprint is about to go under to get them for dirt cheap. Though if AT&T catches more ground with T-Mobile’s addition then they may act fast. There will still be more sales from AT&T than verizon with the iPhone because gsm is still more widely used throughout the world. Things could change when 4G comes out.. who knows. For now we just have to wait and see and watch all the iPhone 5 rumors popup and see how many times Apple stock will get manipulated this year.

  3. I’m not a lawyer but it seems like it would be hard for them to show AT&T has a monopoly if it has less then 50% of the market and there is another company that also has more or close to the same market share, e.g. Verizon. If customers still have two big companies to choose from, then they still have a choice. It’s not as if Verizon and AT&T are being shown to be in collusion.

    1. A duopoly isn’t much better. And I think an argument for tacit collusion could be made. Just look at texting plans, and data metering. No company is willing to give up the charade that is texting because it makes so much money. It’s in both of their interests to keep acting as texting isn’t data, and as if it actually costs them something extra to deliver.

      1. Doom doom doom doom doom,
        doom doom do DOOM,
        DOOOM doom do-doom,
        DOOM do-doom doom doooom,
        doom doom dooom, do-do-DOOOM!

        Doom doom doo doom doom,
        DOOMY-DOOMY-DOOM,
        doom do do DOOM,
        Do do DOOM,
        doomy-doomy-doomy,
        Doom doom doom THE END

    2. In the EU, a monopoly may arise where the market domination is between 20-25%.

      Markets can be fragile and regulation may be necessary to force companies to complete – regulation to promote rather than supplant competition and the market.

  4. Four carriers is too many. There just isn’t enough spectrum for all four to operate at their peak. The better option here would be to have Sprint merge with T-Mobile, thus creating three relatively equal players. The big problem there lies in the difference of network technology (Sprint is CDMA and WiMAX).

    So what does Deutche Telecom do if the deal is blocked? Find another buyer? Shut it down? The latter option seems of interest to the government, as they may be able to reclaim the spectrum and hold another auction. Or would DT be the one who gets to auction that off? Not sure how that works.

  5. So it sounds like the solution for Sprint is for AT&T to convince Apple to make iPhones for Sprint. That’ll take some money, seeing as AT&T is throwing around $25B in cash and another $14B in stock.

  6. While less than 50% overall in the US might not
    technically constitute a monopoly, in some cities
    or markets we don’t have a choice and there is
    a monopoly. Comcast comes to mind.

    1. Cable is different. As is landline phone. Both industries were given government issued monopolies in specific regions. It wasn’t until deregulation of those industries in the not too distant past that we finally started seeing some competition. For instance, at my current apartment, I can choose from 4 different broadband suppliers (Time Warner, AT&T U-Verse, Earthlink Cable, and WOW!). In the past, Time Warner would have been the only choice.

      Those government issued regions allowed companies to build out their infrastructure with little fear of losing money on that investment. It was a good idea at the time, in order to get service to as many people as possible, it just took too long to deregulate, and that’s where many of the issues come from. Luckily, at least where I’m at, those issues are quickly being resolved by more competition.

  7. Hey Sprint, last time I checked the US kinda embraces Capitalism and the Free Market (Although that is fading fast). Write this down so you don’t forget it. If you can’t compete, sell and go out of business. Why should Sprint be any different than any Mom and Pop shop down the street?

    1. There’s a popular board game, where every one starts out even. If they do well, the get to build houses. If they continue, the houses are consolidated into hotels. Very capitalistic. Then, you get down to three players, two with a bunch of properties with hotels, the third, not so much. Then the third guy goes under. Then there is only one. The name of the game is always Monopoly, even when there are six players. Only the time frame changes, never the end result.

  8. This is what I found in a legal dictionary online:

    MONOPOLY, commercial law. This word has various significations. 1. It is the abuse of free commerce by which one or more individuals have procured the advantage of selling alone all of a particular kind of merchandise, to the detriment of the public.
         2.-2. All combinations among merchants to raise the price of merchandise to the injury of the public, is also said to be a monopoly.
         3.-3. A monopoly is also an institution or allowance by a grant from the sovereign power of a state, by commission, letters patent, or otherwise, to any person, or corporation, by which the exclusive right of buying, selling, making, working, or using anything, is given. Bac. Abr. h.t.; 3 Inst. 181.
         4. The constitutions of Maryland, North Carolina, and Tennessee, declare that “monopolies are contrary to the genius of a free government, and ought not to be allowed.” Vide art. Copyright; Patent.

    A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.

    I think most of us think of a monopoly as definition 1, but I don’t think AT&T would meet the criteria of “…selling alone all of a particular kind of merchandise, to the detriment of the public.” They might meet criteria 2.-2. “All combinations among merchants to raise the price of merchandise to the injury of the public, is also said to be a monopoly.” but if they we’re guilty of that they’d already be in trouble without the purchase of T-Mobil.

  9. Does Verizon now purchase Sprint? Seems we are slowly moving towards 1 or 2 primary carriers. Quite possibly this means higher prices for consumers in the long term.

    1. It very well could hurt consumers. But it could also greatly benefit them. Wireless communications are limited by the spectrum available. When there are too many players, there’s not enough spectrum to spread around, and you get coverage gaps in different areas based on the provider. With one less player, that means there is much more spectrum available (even if split evenly among the remaining 3), which should lead to better quality networks and would thus be a benefit for consumers.

  10. Anti-trust? Better to remove the term from the dictionary than to keep pretending that the powers that be give a damn about anti-trust regulations. All they care about is making as much money as possible by any means necessary. Regulations? HAH!

  11. What is needed here is a “game change” moment. And sprint and apple are in a prime position to do it right now.

    Sprint announces that it will be ending native voice service on it’s network, which will be strictly data from now on. All voice service will be provided by VoIP providers. As a part of this, all phones on sprint going forward will be “smart” phones, and that they are going to upgrade their network to LTE with WiMax being used to build up backend.

    Apple announces that it has developed a VoIP service which will be included into it’s new MobileMe suite of applications. They further announce that they that they are partnering with sprint and putting cell chips in all their computers. And they announce the iPhone mini, basically a slightly larger last generation iPod nano with a full front touch screen and wifi/cell chip, exclusively on sprint, priced around $350 new or $50 with a 2nd contract.

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