Sprint Files Suit To Block AT&T/T-Mobile Transaction

In a move that continues to indicate Sprint’s desire to see the end of the AT&T/T-Mobile takeover transaction they have filed suit against AT&T, Deutsche Telekom and T-Mobile USA to block the acquisition. Claiming the deal violates Section 7 of the Clayton Act the lawsuit was filed in the District of Columbia as a related case to the Department of Justice’s own lawsuit against the proposed deal.

“Sprint opposes AT&T’s proposed takeover of T-Mobile,” said Susan Z. Haller, vice president-Litigation, Sprint. “With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.”

Sprint’s lawsuit focuses on the competitive and consumer harms that would end up resulting from the AT&T takeover of T-Mobile USA emphasizing three main points:

  • Harm retail consumers and corporate customers by causing higher prices and less innovation.
  • Entrench the duopoly control of AT&T and Verizon, the two “Ma Bell” descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
  • Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.

One thing is for sure, Sprint isn’t going to let this deal go through without putting up one hell of a fight.

 

Full Press Release:

06 September 2011

Sprint Files Suit to Block Proposed AT&T and T-Mobile Transaction

WASHINGTON (BUSINESS WIRE), September 06, 2011 – Sprint Nextel [NYSE:S] today brought suit against AT&T, Inc., AT&T Mobility, Deutsche Telekom and T-Mobile seeking to block the proposed acquisition as a violation of Section 7 of the Clayton Act. The lawsuit was filed in federal court in the District of Columbia as a related case to the Department of Justice’s (DOJ) suit against the proposed acquisition.

“Sprint opposes AT&T’s proposed takeover of T-Mobile,” said Susan Z. Haller, vice president-Litigation, Sprint. “With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.”

Sprint’s lawsuit focuses on the competitive and consumer harms which would result from a takeover of T-Mobile by AT&T. The proposed takeover would:

  • Harm retail consumers and corporate customers by causing higher prices and less innovation.
  • Entrench the duopoly control of AT&T and Verizon, the two “Ma Bell” descendants, of the almost one-quarter of a trillion dollar wireless market. As a result of the transaction, AT&T and Verizon would control more than three-quarters of that market and 90 percent of the profits.
  • Harm Sprint and the other independent wireless carriers. If the transaction were to be allowed, a combined AT&T and T-Mobile would have the ability to use its control over backhaul, roaming and spectrum, and its increased market position to exclude competitors, raise their costs, restrict their access to handsets, damage their businesses and ultimately to lessen competition.

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  • tm

    This is just like computer graphics 20 years ago it was getting very successful so they all started gobbling up each other till basically 1 company was left. It’s just capitalism’s bad side but good if you own stock.
    TMo, as it’s customers know, is a good company. Maybe they can just keep on making money and stop looking over their stupid girly shoulders at VZ and ATT. Nut-cases they are, all of them.

  • Anonymous

    I’m liking Sprint. If this deal goes through they are looking as the most viable option

  • TMoFan

    Even though Sprint is being entirely selfish here, I love seeing this “merger” face more hurdles. This deal was once thought to fly through, but it looks like the tides have changed and seeing the analysts backpedal is hilarious. Sprint knows it’s screwed if this this thing goes forwards, and at&t knows that too. That was their motivation in the first place, not LTE. They take out a competitor and put another one in jeopardy with this buyout. I hope this gets some attention in court, and at&t’s anti-competitive ways are exposed for all to see.

    • ogopogo

      There were a number of TMONEWS posters that all threw in the towel days after the original announcement. More than one said that this was a “Done Deal”. Where are those pundits now?

      • Ted

        Unfortunately they are still around…they have now shifted their argument to “dt wants out, it doesn’t matter if this deal goes through they will either sell to someone else or go out of business”. Apparently the “its a done deal” people think they can predict the future and know what all these corporations want and feel.

    • Joe

      I agree that this is not a merger… it’s an acquisition. I hear people say it’s a merger all the time, even T-Mobile leaders telling the employees it’s a merger. Not true. Whether the deal goes through or not, it’s not going to be pretty for T-mobile employees.

    • Joe

      I agree that this is not a merger… it’s an acquisition. I hear people say it’s a merger all the time, even T-Mobile leaders telling the employees it’s a merger. Not true. Whether the deal goes through or not, it’s not going to be pretty for T-mobile employees.

    • Joe

      I agree that this is not a merger… it’s an acquisition. I hear people say it’s a merger all the time, even T-Mobile leaders telling the employees it’s a merger. Not true. Whether the deal goes through or not, it’s not going to be pretty for T-mobile employees.

  • Anonymous

    I will never understand why folks think DT will close up shop or sell T-Mo off in pieces if thisdeal falls through. Lets rewind back to before this acquisition was announced. Lets say it was never announced. Do you all really think DT was planning on closing up shop before AT&T made their offer? The company might not be making as much profit as DT wants but it still makes money. Also, DT has been wanting to sell for a while now. Just because one deal falls through doesn’t mean he’s just going to give up. He would lose a boat load of money if he just closed TMO down. 

    I’m sure if this deal falls through, TMO will continue to operate the way it did before all this merger crap happpened. Its kinda like selling a phone, car, etc. You will get potential buyers, but not all the deals that are offered will go through. Does that mean give up on what you’re selling because the highest bidder doesn’t want your product? No. You keep on going until someone else steps up.

  • Moe

    Go Sprint go. Having one company control all of the gsm spectrum is an impossible situation. I wonder if Sprint is willing to offer existing TMO customers the same rate that tmo offers. This would help tens of thousands of TMO customers make the move.

  • MIKEEEEE

    if sprint covered 38221, i’d be there in a minute.

  • http://pulse.yahoo.com/_AWWIKW6MNPUHOC4OVSHWUDWAHM Fabio

    Thank you Sprint, even tho you are doing this for your own benefit, it benefits consumers either way and you know it and you are using this to your advantage! None the less, I am glad you’re doing this, as AT&T and T-Mobile cannot merge and control the total GSM market. It is bad for the economy for BOTH consumers AND Sprint!

  • http://pulse.yahoo.com/_AWWIKW6MNPUHOC4OVSHWUDWAHM Fabio

    Thank you Sprint, even tho you are doing this for your own benefit, it benefits consumers either way and you know it and you are using this to your advantage! None the less, I am glad you’re doing this, as AT&T and T-Mobile cannot merge and control the total GSM market. It is bad for the economy for BOTH consumers AND Sprint!

  • http://twitter.com/KARMA773 Karma

    oh by the way sprint will get it’s GALAYXS2 aka EPIC 4G TOUCH. in about a week. wirefly  is doing pre sale= PRE ORDER offer for $119 free shipped for the galaxys2 from sprint. U GO SPRINT!

  • http://twitter.com/KARMA773 Karma

    oh by the way sprint will get it’s GALAYXS2 aka EPIC 4G TOUCH. in about a week. wirefly  is doing pre sale= PRE ORDER offer for $119 free shipped for the galaxys2 from sprint. U GO SPRINT!

  • http://hand-gadget.com Alex Nguyen

    Should I stay with T-Mobile, or switch to Sprint or Verizon? Read my plea for help to decide at little green robot . net