Sprint sues to block AT&T, T-Mobile merger [Update]

Sprint sues to block AT&T, T-Mobile merger

Not content to let the government get its digs in, Sprint is suing to block the AT&T, T-Mobile merger because it says the deal would violate Section 7 of the Clayton Act.

Sprint says the deal would harm consumers and it would also disturb competition. In particular, it said the AT&T, T-Mobile deal 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.

If the AT&T, T-Mobile deal went through, it would create the largest carrier in the United States and would create a near monopoly on the GSM market in the United States. AT&T says the deal would allow it to cover nearly all of the country with advanced mobile broadband, give AT&T more spectrum to build for the future and enable it to improve coverage across the country.

Sprint and the U.S. government obviously disagree.

Update: AT&T has send us an official comment on the Sprint lawsuit and the gloves are off:

This simply demonstrates what we’ve said all along – Sprint is more interested in protecting itself than it is in promoting competition that benefits consumers. We of course will vigorously contest this matter in court as AT&T’s merger with T-Mobile USA will: help solve our nation’s spectrum exhaust situation and improve wireless service for millions; allow AT&T to expand 4G LTE mobile broadband to another 55 million Americans, or 97% of the population; and result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most

[Via Sprint]

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