Monday, March 28, 2011, 09:40 pm PT (12:40 am ET)
Sprint officially opposing AT&T acquisition of T-MobileWireless provider Sprint Nextel has formally declared its opposition to AT&T's proposed acquisition of T-Mobile, on the grounds that the deal will "harm consumers and harm competition."
Sprint, the third largest wireless carrier in the U.S., went on record against the $39 billion deal in a press release issued Monday. AT&T and T-Mobile parent company Deutsche Telekom announced the purchase earlier this month.
In its press release, Sprint argued that the acquisition "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."
The statement went on to point out that a combined AT&T and T-Mobile would be "almost three times the size" of Sprint in terms of wireless revenue, creating a Verizon and AT&T duopoly, which Sprint compared to the original U.S. telephone monopoly, dubbed "Ma Bell."
"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," the statement read.
"Sprint urges the United States government to block this anti-competitive acquisition," said Vonya McCann, senior vice president, Government Affairs. "This transaction will harm consumers and harm competition at a time when this country can least afford it."
Last week, Sprint executives spoke out informally against the acquisition, expressing concerns over how the deal would affect pricing and costs for the company. "If this transaction goes through youre talking 79 percent, or roughly 80 percent of the market controlled by two companies. I think thats a little too muchtoo much concentration," Sprint CEO Dan Hesse told CNBC's Jim Cramer.
Federal approval for the deal is expected to take at least a year. T-Mobile posted a FAQ to its website, noting that the carrier "remains an independent company" while the FCC and Department of Justice review the deal, and, as such, does not yet offer Apple's iPhone.
The Wall Street Journal reported last week that an anonymous official at the Federal Communications Commission expects FCC approval of the deal to be "a steep climb to say the least."
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