Sprint Says Anti-Competitive
Sprint (NYSE: S) has not been a fan of a recent announcement that AT&T (NYSE: T)/T-Mobile (DTEG) plan to merge. Sprint is outspoken of its displeasure and distinct opposition to a marriage of the #1 and #4 mobile providers specifically, in being a #3 provider in what may prove a consolidation of markets and conjecture of a possible duopoly, leaving two monster competitors, AT&T/T-Mobile and Verizon (NYSE: VZ).
Sprint’s Dan Hesse spoke to the Common Wealth Club in San Francisco recently to denounce the merger with a stinging indictment that proposes a serious lack of future innovation within the mobile industry.
“As we meet here today, the innovative power of the wireless industry is under serious threat, but to my surprise, very little attention had been paid to its potential impact on the wireless industry’s ability to foster innovation.” See (Cell Power)
AT&T released its rebuttal by Jim Cicconi, (Senior Executive Vice President-External and Legislative Affairs), to Hesse’s comments with what seems to be the “last-straw” in keeping a low profile, in general, about the attacks on its merger plans.
“Given that Sprint is a major competitor to AT&T in the hyper competitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger. But it is self-serving for them to argue that the highly competitive wireless market they cited only months ago is now threatened by the very type of transaction they seemed prepared to defend previously.” See (AT&T Response to Hesse Remarks)
Without doubt the AT&T/T-Mobile merger has created a “perfect-storm” in speculation and comments within industry expert communities, both touting it (approval-ready) for regulators, or extolling it as a horizontal merger of (nightmarish proportions) which should never see the “light of day”. Both sides seem adamant in their convictions and opinions but the real test will lie with the DOJ and FCC which inevitably has to go through a market by-market due-diligence, dissecting local competitiveness with a before and after merger metrics.
Sprint Moves to Solidify Market Position
Since the announcement by AT&T, Sprint has moved to solidify its position within the market. In a move that helps Sprint shore up its relationship with Clearwire, it agreed to pay the wholesaler $1 Billion over the course of the next 2 years which ends a disagreement with both companies and forges a new relationship going forward. Since Clearwire changed CEO’s to Bill Stanton, the two companies have been meeting to settle their differences, while recent happenings within the market have moved the process to the fore-front.
Sprint has recently begun testing LTE as the technology needed to compete in the long-term rather than a WiMAX route which has been their technology of choice. It seems both companies have are testing the more main-stream LTE as a possible alternative in a forward thinking plan to use a more industry standard technology. Talks with Lightsquared have continued to be rumored as a possible partner with Sprint which could beef up needed spectrum and rental revenues, again in light of a possible move into a more consolidated industry. See (Sprint and Clearwire Kiss and Make Up. But Where’s WiMAX?)
As the AT&T/T-Mobile merger proposal continues dominate the media spectrum and mobile companies spar back and forth on its merits, Sprint has not set back in the “easy-chair” of complacency, but has moved to solidify a more competitive position related to impending events, whether they materialize, or not. And it continues to pound-out the same message to regulators, that this merger is not good for the mobile industry.