Sprint CEO Dan Hesse says AT&T and T-Mobile merger would increase chances of Verizon acquiring Sprint

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AT&T’s potential acquisition of T-Mobile has been stirring up a lot of controversy lately, and yesterday the U.S. Senate hit executives from both companies with some hard-hitting questions. Why is the merger necessary? Aren’t AT&T and T-Mobile direct competitors? AT&T CEO Randall Stephenson and T-Mobile CEO Phillipp Humm dodged most of these questions and fed the Senate answers that are straight out of the PR playbook – answers that we’ve already heard before.

Other carriers and their executives chimed in. ThisIsMyNext reports (emphasis my own):

Sprint CEO Dan Hesse and Cellular South CEO Victor Meena argued forcefully against the merger, saying that they wouldn’t be able to compete with a duopoly that Hesse quite charmingly referred to as “the Twin Bells.” (Meena later said it was “only a matter of time before Ma Bell came back as two sisters,” which took a solid second place in the metaphor competition.) Notably, Hesse admitted that allowing the merger would increase the chances of Verizon acquiring Sprint, which we haven’t heard Sprint say as directly in the past.

It’s bad enough that there are plenty of jokes surrounding AT&T’s return to monopolistic dominance, but to think that the U.S. would be forced to deal with a duopoly between AT&T and Verizon is undoubtedly bad for consumers.

The carriers are having a difficult time coming up with reasonably good excuses in favor of the merger, but there are few gems:

AT&T’s best argument of the day? A promise that it will build rural broadband covering 97 percent of Americans with entirely private funds, freeing taxpayer money to hit the remaining three percent.

The question is whether the good will ultimately outweigh the bad, and in my opinion the potential negative outcomes seem insurmountable. Lack of choice for consumers and control over such a huge market when it comes to pricing and technological options could stifle innovation even more. Count me in on the side of Dan Hesse and everyone else against the merger–it seems like it’s just a bad idea.

[Via: ThisIsMyNext]

  • Anonymous

    The US is screwed. Not only do its consumers already pay more for the same service, but now they will have less choice. All AT&T needs to do, to get this passed through Congress and the FCC, is budget more dollars to pay off a few key politicians. The deal is done. Get over it…it’s what you voted for.

    As for bribing politicians…the Supreme Court has already ruled this as a form a free speech for corporations.

  • http://pulse.yahoo.com/_UD6HYR2A35ZHCJVBPFJXSDM2AM v.o.r

    If AT&T is only after the frequencies, maybe they’ll accept a deal where they divest the contract customers to Sprint and prepaid customers to MetroPCS, Cricket, etc. while continuing to provide service at minimal wholesale rates until those customers switch to new devices.

    • Frank

      Don’t believe the hype from AT&T. They have a ton of spectrum, they are just not telling the truth and are wanting everyone to believe their b.s.

      They want to take out a competitor and keep Sprint from buying T-Mo and becoming a real player.

  • Enoel69

    Lets hope common sense and cooler heads will protect consumers and make sure choice of carriers is protected. More choice equals more competitive cell prices and more choice of devices. In me view four major carriers for such a huge market as ours is just about right…two GSM and two CDMA. If u are someone who love GSM devices u will at least have another carrier to choose from if not pleased with the services offered by one.

  • http://twitter.com/WillieFDiazSF William Diaz ?

    Not only will Sprint and its massive spectrum holdings seem suddenly more attractive to Verizon, which is why Verizon IS NOT against the merger of AT&T-Mobile – because they want to make a competitive move for Sprint but they will not look like the bad guy when they do it.

    “AT&T’s best argument of the day? A promise that it will build rural broadband covering 97 percent of Americans with entirely private funds, freeing taxpayer money to hit the remaining three percent.”
    Which is AT&T’s way of secretly saying “We will built it out 97% using our own money and the money of special interest groups and then have speeds listed as above the government version of broadband, but then also charge an arm and a leg, and since we now are the only company doing it, there will be no choice, so of course we will make money off this… leaving the government to flip the 3% bill of the rest of it, and leaving them with no choice but to give the money to AT&T and have them build out for them. LAME!!

  • Patriot

    Have you ever heard of Capitalism ? Free Markets ? If T-Mobile cannot make it in the marketplace on their own then the marketplace will eliminate them…..why are you looking to government to decide who wins and who loses in the marketplace ? Some regulation is necessary to prevent anarchy….to much regulation is a boat anchor on our economy.

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