The proposed $39B acquisition of T-Mobile by AT&T has already attracted a lawsuit from the Department of Justice, which wants the wedding blocked. Now rival telecom Sprint Nextel has filed against the deal, claiming it would be anticompetitive.
Sprint believes that if the deal goes through, the wireless market will effectively be a duopoly between AT&T and Verizon, with Sprint coming in a distant third. The top two companies would control 90% of the market between them.
According to a report in Hillicon Valley, Sprint expects that its own action will be added into that of the DOJ, which is slated for the Court of Appeals for the District of Columbia Circuit.
Sprint believes that the two companies would have ample tools to make life next to impossible for competitors, partly by leveraging its contol over backhaul, roaming and spectrum, and partly by the sheer force of their huge market position.
According to HV, Sprint’s Susan Z. 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.”
The FCC is also reviewing the proposed transaction.
RBR-TVBR observation: Sometimes you see companies remain on the sidelines when a huge megadeal is struck – on the one hand, they don’t want to battle a strengthened competitor, but on the other, they don’t want to set a precedent that might hamper their own expansion plans. The fact that this deal is attracting legal action from both the public and the private sector cannot be a good sign.