Sprint faces uphill battle against AT&T and T-Mobile merger

Sprint confirmed it will formally oppose AT&T’s purchase of T-Mobile, but the #3 wireless carrier faces an uphill battle. Sprint is smaller than AT&T and spends less money on lobbying than its larger competitor. In 2010, Sprint spent a mere $2.5 million on lobbying, while its former Ma Bell rival spent $15.3 million. Due to the disparity in spending, Sprint is limited in its ability to influence policy and garner support among attorney generals and other officials that want to stand against the merger.

Sprint will oppose the AT&T buyout of T-Mobile by focusing on the national market, an argument that is contrary to AT&T’s local position. During a recent press conference held to discuss the merger,  AT&T argued that the deal would not affect competition within most local markets. Most markets in metropolitan areas are covered by several carriers and the union of AT&T and T-Mobile will have little effect on consumer choice in these markets. Sprint, however, will bring the argument back to the national level where an the announced merger will drop the number of major wireless carriers from four to three. This argument for consideration of the national market will be a difficult sell as previous regulatory investigations have focused on competition at the local level.

Lastly and perhaps most importantly, AT&T is ready for this battle. Since day one, the wireless carrier has been preparing for this regulatory review and has established a team of antitrust lawyers to navigate these tricky waters. The wireless company also stated publicly it is focused on getting this deal passed and is not concerned with the objections raised by Sprint and other wireless operators. The deal is in the early stages of the approval process and is expected to take about a year to complete.

[Via Wall Street Journal]

Back to top ▴