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.

sprintstock560
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.

Top Rated Comments

coder12 Avatar
164 months ago
Nice corporate love-triangle going on here. Someone should make a movie.

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
Score: 8 Votes (Like | Disagree)
aohus Avatar
164 months ago
you know somethings up when Verizon CEO tacitly approves of the AT&T/T-Mobile merger.

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.
Score: 7 Votes (Like | Disagree)
ravensfan55 Avatar
164 months ago
The basis of the DOJ challenging the deal is that it eliminates T-Mobile, gives users one less choice and also gets rid of a value priced carrier.

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.
Score: 7 Votes (Like | Disagree)
JAT Avatar
164 months ago
I would be interested in only two US carriers if they can then have the bargaining power to push around Apple more and force carrier branding on the front of the iPhone.

Why on earth would that be a reason for anything? Even a joke?
Score: 5 Votes (Like | Disagree)
Tarzanman Avatar
164 months ago
Why do people keep calling it a merger? Its a takeover. If you're a mid level manager at T-mobile then you should already be looking for a new job
Score: 5 Votes (Like | Disagree)
toddybody Avatar
164 months ago
"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."

Dan Hesse must have this poster hung over his desk...


Score: 4 Votes (Like | Disagree)

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