Wireless carrier Sprint Nextel sues AT&T in an attempt to ask the Justice Department to block plans on a $39 billion merger with T-Mobile as one of the biggest mergers in American History could become a monopoly.
“In one fell swoop, AT&T’s proposed purchase would eliminate one of four national competitors and marginalize a second (Sprint), pushing the market back toward a 1980s-style cell phone duopoly, that would force consumers to endure higher prices and be denied the fruits of vigorous innovation.”
The company said on Tuesday that it filed its own lawsuit in the United States District Court in Washington, echoing the Justice Department’s argument that allowing the deal to go through would significantly restrict the American cellphone service landscape. “AT&T’s proposed takeover of T-Mobile is brazenly anticompetitive,” Sprint wrote in its complaint.
Sprint’s chief executive, Daniel Hesse, has been exceptionally vocal in listing reasons to oppose the deal. Should the merger go through, he said in a speech this year, “competition will be stifled, growth will be stifled, and wireless innovation will be jeopardized.”
However, AT&T and T-Mobile seem to be more focused on the suit right now. The company has said that it plans to fight the Justice Department, though it plans to continue talks with the government in hopes of securing a settlement. And T-Mobile’s current owner, Deutsche Telekom, has also said it would take steps to ensure the merger goes through.
Sprint could also ask to have the cases consolidated against AT&T, Sprint saying it could bring, “some legal and economic firepower to the government’s” suit and give the company a role in any settlement talks.
“Sprint is more interested in protecting itself than it is in promoting competition that benefits consumers,” AT&T said in a statement.