AT&T and Sprint Trade Barbs Over T-Mobile Merger
Sprint CEO Dan Hesse has been a constant critic of the proposed AT&T/T-Mobile merger, hammering the deal as bad for competition and bad for consumers. However, Hesse said yesterday that he isn't an opponent of all telecom mergers, but believes that the Department of Justice would view an alternate merger pair -- such as T-Mobile and Sprint, perhaps -- very differently.
However, if such a hypothetical deal were reached, “You could make a very, very strong argument” that the antitrust regulators would approve it, Hesse said. He said the hypothetical combination of of two value players could allow a strong competitor to Verizon Wireless and AT&T.
AT&T's head lobbyist, Jim Cicconi, AT&T Senior Executive Vice President, External and Legislative Affairs had harsh words for Hesse in response:
Yesterday, the CEO of Sprint said the Department of Justice should block AT&T from merging with T-Mobile, but would have good reasons to instead allow Sprint to purchase them. For months Sprint has spoken disingenuously about their motives for opposing AT&T's merger with T-Mobile. Now, Mr. Hesse's public musings have made their motives much more clear. That they would act in their own economic interest is not surprising. That they would expect the United States Government to be a willing partner certainly is.
A federal judge set a mid-February 2012 trial date to hear the Department of Justice's arguments for blocking the merger, but denied Sprint's request to join the DoJ's suit.
Dan Hesse and Sprint have a poor track record regarding large mergers. When Sprint and Nextel merged in 2005, the companies said the value of the merged company would be $70 billion. Today, Sprint's market cap is just over $9 billion.
Sprint's stock price is down more than 80% since Dan Hesse took over as CEO in December 2007.
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Top Rated Comments
In a world where three cell phone companies are in love...
Data Prices are STILL ridiculous
Starring that guy from "The Social Network" as Sprint, Brett Favre as AT&T who just constantly teases to buy T-Mobile, and the "Can you hear me now?" guy as Verizon
On the internet in December 2012
*active 10gb data plan required
Can anyone say duopoly?
to anyone who seriously thinks the end user will benefit from a AT&T/T-Mobile merger is laughable. consumers will lose, and corporations and their top tiered executives will win.
A Sprint-T-Mobile merger would do the same thing. One less choice for consumers, and a value priced carrier is eliminated. Then the succeeding company could raise their prices, not to that of AT&T and Verizon but still higher than they currently are.
Hesse's argument is a red herring. Whether it's AT&T or Sprint who is buying T-Mobile, there will be the same end result.
That being said, AT&T is a much better match. Sprint is still integrating Nextel. Adding a whole new technology to the mix would be a disaster.
Why on earth would that be a reason for anything? Even a joke?
Dan Hesse must have this poster hung over his desk...