Mergers & acquisitions

AT&T & Sprint's War of Words Gets Louder

Sprint Corp. (NYSE: S) CEO Dan Hesse reiterated his opposition to AT&T Inc. (NYSE: T)'s planned acquisition of T-Mobile US Inc. Friday, but this time AT&T wasn't having it. (See Sprint Plans to Fight the AT&T/T-Mobile Deal.)

Hesse's comments are way off base, according to Jim Cicconi, senior executive vice president-external and legislative affairs for AT&T. Writing in a blog post shortly after Hesse spoke at a Sprint event in San Francisco, Cicconi pointed out where Hesse's remarks contradict what Sprint's top exec has said in the past.

Cicconi cited three (unspecified) occasions in which Hesse called the wireless market hyper-competitive and reportedly said that M&A is the way to get growth in the industry.

"Given that Sprint is a major competitor to AT&T in the hyper competitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger," Cicconi wrote. "But it is self-serving for them to argue that the highly competitive wireless market they cited only months ago is now threatened by the very type of transaction they seemed prepared to defend previously."

Sprint is the 58th largest corporation in America with 50 million customers, $40 billion in annual revenue and "the self-proclaimed #1 spectrum position in the industry," Cicconi continued. Why are they so scared of one measly transaction?

The reason, according to Hesse, is that the acquisition would pose a serious threat to industry innovation.

"We just cannot let this happen," Hesse said Friday, according to Bloomberg. "If the proposed AT&T and T-Mobile merger is allowed to go forward it can also push the wireless industry from competition to duopoly."

AT&T's Ciconni challenged Sprint to "respond in the marketplace," presumably rather than anytime he's on stage. "Where customers have ample choices, as they clearly do in wireless, any competitor can improve its prospects by offering a better idea, a better product, better service or a better price," he wrote.

Meanwhile, Verizon Wireless is staying quiet in the war of words -- for now at least.

The Federal Communications Commission (FCC) officially began its investigation of the proposed merger Thursday, and the Senate Judiciary Committee will hold a hearing on it on May 11. (See Regulatory Scrutiny Escalates for AT&T/T-Mobile.)

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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