Unwilling to compromise, Sprint is taking on a huge role in opposing the $39 billion merger of AT&T and T-Mobile, with the nation’s third-largest carrier going on the record Monday with its formal opposition. This isn’t really a surprise given the statement it made the day after the merger was announced, but Charles McKee, VP of government affairs, federal and state regulatory, at Sprint, has shared more details on the operator’s plans. The most significant is that Sprint says concessions won’t matter and nothing will get the company to change its stance, not even net neutrality for wireless networks, special access reforms or other issues that have been floated as possible concessions.
McKee also cast doubt on AT&T’s spectrum crisis argument, noting, “Spectrum is important to the market but this transaction doesn’t appear to be a resolution of any shortage of spectrum. AT&T has spectrum and buying T-Mobile doesn’t change that significantly, nor does it resolve any spectrum problem for the industry per se.” He said AT&T buying T-Mobile doesn’t change the overall availability of spectrum for competitive players; allocating more spectrum is the only thing that could do that.
And that’s the crux of McKee’s and Sprint’s argument. The deal would result in a phenomenal aggregation of revenue and subscribers at the top two largest carriers, AT&T and Verizon Wireless. McKee said that from a revenue perspective, AT&T and Verizon would have 76.4 percent of the market versus 16.6 for Sprint. In terms of subscribers, the two companies would represent 72 percent of the customers versus 18 percent for Sprint. He hoped those figures on a nationwide basis, as opposed to the market-by-market competition analysis that AT&T is hoping for would sway regulators as to the anti-competitive nature of this deal.
As for Sprint, when asked about an acquisition of its own to boost its market share, McKee declined to comment, saying, “Our primary focus will be on this acquisition and aggressively competing in the marketplace.” Sprint isn’t the only one worried about the creation of what would essentially become a wireless duopoly after the merger; we at GigaOM are uncomfortable with this deal, as are the folks at The Economist and writers at PCMag. The deal will have to be approved by both the Department of Justice and the Federal Communications Commission, and I’ve covered how people can offer input before an official case is opened at either agency. It appears that AT&T and T-Mobile will file for judgment on their merger with the FCC in mid-April, which will then set the approval process rolling.