Sprint CEO Dan Hesse on Friday reiterated his opposition to the pending merger of AT&T and T-Mobile, arguing that the deal poses a “serious threat” to the wireless industry.
“We just cannot let this happen,” Hesse said during an event in San Francisco, as reported by Bloomberg. “If the proposed AT&T and T-Mobile merger is allowed to go forward it can also push the wireless industry from competition to duopoly.”
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Late last month, Sprint formally objected to the merger 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 at the time. “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 month 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.
The week after the merger was announced, the CEOs of AT&T, Sprint, and Verizon took the stage for a panel at the CTIA Wireless trade show, during which Hesse said he had “concerns that [the deal] would stifle innovation and that too much power would be in the hands of two.”
Ultimately, however, “my opinion doesn’t matter; I think the FCC and the DOJ will have something to say about that,” Hesse said.
Dan Mead, president and CEO of Verizon Wireless, meanwhile, was a bit more coy. “We’re certainly very interested in what’s going on, and we’re going to be observers,” he said. “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. We’re not going to get distracted by this.”
Not surprisingly, AT&T has disagreed with Sprint’s assessment. In a Thursday blog post, AT&T’s Joan Marsh argued that “the surest, fastest and most efficient path by far to addressing the capacity limitations we face in the near term is to acquire T-Mobile and its highly complementary spectrum portfolio and network assets.”
Also this week, the Federal Communications Commission formally kicked off its investigation of the deal by opening a public notice. On May 11, the Senate Judiciary Committee will also hold a hearing on the matter.
Update: AT&T on Friday issued another blog post in response to Hesse’s comments, calling them “way off base.” AT&T’s Jim Cicconi pointed to comments from Hesse in which he called the wireless industry “hyper competitive” and seemed to support a certain amount of consolidation in the market.
“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,” Cicconi wrote. “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.”
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