AT&T’s proposed $39 billion acquisition of T-Mobile USA threatens competition and innovation in the wireless industry, Dan Hesse, Sprint Nextel’s chief executive, said on Friday.
“Innovation and customer choice would be seriously affected if the wireless industry is allowed to become a duopoly,” he said, referring to AT&T and Verizon, the two carriers that would dominate the mobile phone market if the deal is approved by federal regulators.
Sprint started campaigning against the acquisition almost immediately after it was proposed last month. The deal would widen AT&T’s lead over Verizon Wireless and leave Sprint a distant third.
AT&T, which has 95.5 million subscribers, would add 33.7 million more by buying T-Mobile. Verizon has 94.1 million subscribers while Sprint has just under 50 million.
Mr. Hesse, speaking in San Francisco at the Commonwealth Club, said Sprint would have trouble competing against a bigger AT&T and Verizon, whose size would be unchanged, because they could use their size to get exclusive access to the newest phones. They would also benefit from cost advantages that come with being bigger companies.
“Whoever the supplier is, you can say, ‘Hey, I’ll take all of your production,’” Mr. Hesse said of his competitors. “They could restrict our access to some of the cool devices.”
Sprint is joined in its opposition to the merger by Consumers Union, the consumer watchdog group that has complained that the acquisition would lead to higher prices for mobile phone subscribers. Companies that make mobile phone apps, among others, may join Sprint in its fight, Mr. Hesse said.
James W. Cicconi, AT&T senior executive vice president, external and legislative affairs, responded to Mr. Hesse’s comments by saying, ”They are way off base” and “totally at odds with his own past statements.” Last year, he said, Mr. Hesse repeatedly described the wireless industry as “competitive.”
“Given that Sprint is a major competitor to AT&T in the hypercompetitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger,” Mr. Cicconi said in a statement.”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.”
AT&T has defended the acquisition by saying that there is plenty of competition in the wireless market like MetroPCS, a smaller carrier, and that buying T-Mobile would give Americans more high-speed mobile Internet access.
The acquisition’s fate is largely in the hands of the Department of Justice, which will review the deal for antitrust issues. The Federal Communications Commission is also conducting a review.
In addition to attacking AT&T, Mr. Hesse unveiled a new phone on Sprint’s network, the Samsung Replenish, which is intended to be more ecologically friendly than many other devices. It is billed as the first eco-friendly phone. (Virgin Mobile has a eco-friendly Samsung phone called the Restore.)
The casing’s plastic content is 34.6 percent recycled. Sprint said that 82 percent of the device can be recycled.
“Innovation and customer choice would be seriously affected if the wireless industry is allowed to become a duopoly,” he said, referring to AT&T and Verizon, the two carriers that would dominate the mobile phone market if the deal is approved by federal regulators.
Sprint started campaigning against the acquisition almost immediately after it was proposed last month. The deal would widen AT&T’s lead over Verizon Wireless and leave Sprint a distant third.
AT&T, which has 95.5 million subscribers, would add 33.7 million more by buying T-Mobile. Verizon has 94.1 million subscribers while Sprint has just under 50 million.
Mr. Hesse, speaking in San Francisco at the Commonwealth Club, said Sprint would have trouble competing against a bigger AT&T and Verizon, whose size would be unchanged, because they could use their size to get exclusive access to the newest phones. They would also benefit from cost advantages that come with being bigger companies.
“Whoever the supplier is, you can say, ‘Hey, I’ll take all of your production,’” Mr. Hesse said of his competitors. “They could restrict our access to some of the cool devices.”
Sprint is joined in its opposition to the merger by Consumers Union, the consumer watchdog group that has complained that the acquisition would lead to higher prices for mobile phone subscribers. Companies that make mobile phone apps, among others, may join Sprint in its fight, Mr. Hesse said.
James W. Cicconi, AT&T senior executive vice president, external and legislative affairs, responded to Mr. Hesse’s comments by saying, ”They are way off base” and “totally at odds with his own past statements.” Last year, he said, Mr. Hesse repeatedly described the wireless industry as “competitive.”
“Given that Sprint is a major competitor to AT&T in the hypercompetitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger,” Mr. Cicconi said in a statement.”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.”
AT&T has defended the acquisition by saying that there is plenty of competition in the wireless market like MetroPCS, a smaller carrier, and that buying T-Mobile would give Americans more high-speed mobile Internet access.
The acquisition’s fate is largely in the hands of the Department of Justice, which will review the deal for antitrust issues. The Federal Communications Commission is also conducting a review.
In addition to attacking AT&T, Mr. Hesse unveiled a new phone on Sprint’s network, the Samsung Replenish, which is intended to be more ecologically friendly than many other devices. It is billed as the first eco-friendly phone. (Virgin Mobile has a eco-friendly Samsung phone called the Restore.)
The casing’s plastic content is 34.6 percent recycled. Sprint said that 82 percent of the device can be recycled.
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