Sprint Plans to Fight the AT&T/T-Mobile Deal
While Sprint CEO Dan Hesse did not mention the mega deal during his keynote address on Tuesday at the International CTIA WIRELESS 2011 show in Orlando, Fla., it seems the more he voices his concerns about the deal, the more they sound like fighting words. (See CTIA 2011: Verizon, Sprint CEOs React to AT&T/T-Mobile Combo and AT&T/T-Mobile: Riddled With Regulatory Risk.)
Hesse told Bloomberg in an interview that the combined AT&T and T-Mobile entity would have "tremendous" market power and that Sprint would file its complaints about the merger with Congress during the upcoming regulatory review.
The AT&T/T-Mobile deal, if approved, would put the U.S.'s third-largest operator in an even more distant third place in the market. (See What Happens to Sprint After AT&T/T-Mobile Merger?)
Hesse has also said in an interview on CNBC's Mad Money with Jim Cramer show that if the deal is approved, the two big U.S. wireless operators, AT&T and Verizon Wireless , would have a 79 percent share of contract wireless customers in the country. "I think that's a little too much ... concentration," said Hesse.
In the same interview, he also hinted at a possible concession that AT&T could make in order to win regulatory approval for the deal. In short, Hesse wants AT&T, as well as Verizon Communications Inc. (NYSE: VZ), to lower the fixed-line access charges that Sprint has to pay them for backhaul network capacity to its cell sites.
"Roughly a third of our costs of operating the cell site go to AT&T and Verizon ... to pay for access," said Hesse in the CNBC interview. "And those rates are usurious. They're very, very high. And so we would hope to see our backhaul costs come down dramatically, at a minimum."
These certainly won't be the last words from Hesse about the deal as U.S. lawmakers and policymakers tackle the lengthy approval process.
— Michelle Donegan, European Editor, Light Reading Mobile