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

Sprint announced on Tuesday that it has filed a lawsuit with a federal court in the U.S. District of Columbia in an effort to block AT&T’s planned $39 billion acquisition of T-Mobile USA from Deutsche Telekom. The suit is related to the Department of Justice’s lawsuit, which was filed on August 31st. “Sprint opposes AT&T’s proposed takeover of T-Mobile,” Sprint’s vice president of litigation Suzan Haller said. “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 argued that the merger will “harm retail consumers and corporate customers by causing higher prices and less innovation” and said it will “entrench the duopoly of AT&T and Verizon” by allowing those two carriers 90% of U.S. wireless profits and more than three quarters of the market. Sprint also said the merger would “harm Sprint and other independent wireless carriers” and would give AT&T control of backhaul, roaming and wireless spectrum. AT&T responded to the DOJ’s suit last week and said the deal is in the best interest of consumers and the “facts will prevail in court.”  Read on for the full press release from Sprint.

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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