Sprint Asks U.S. to Block AT&T’s ‘Anticompetitive’ Purchase

Sprint Smartphone
A Kyocera Corp. Echo smartphone is unveiled in New York, U.S., on Monday, Feb. 7, 2011. Photographer: Ramin Talaie/Bloomberg

March 28 (Bloomberg) -- Sprint Nextel Corp., the third-largest U.S. wireless provider, said AT&T Inc.’s planned $39 billion takeover of T-Mobile USA will damage industry competition and called on the government to block it.

“We think the anticompetitive nature of the transaction simply will not allow it to pass,” Charles McKee, a Sprint vice president of government affairs, said today in an interview. “This is really an important transaction to stop.”

Sprint said in a statement that the industry would be dominated by two carriers, the combined AT&T-T-Mobile and Verizon Wireless. AT&T said March 20 it agreed to buy T-Mobile from parent Deutsche Telekom AG, pending government approval. The deal would combine the second- and fourth-largest U.S. wireless providers.

Sprint had also held talks with Bonn-based Deutsche Telekom to buy T-Mobile, people with knowledge of the matter said this month. McKee declined to say whether Sprint had held discussions with T-Mobile over a possible merger.

McKee said Overland Park, Kansas-based Sprint would voice its objections throughout the regulatory process, which AT&T said could take 12 months. Dan Hesse, Sprint’s chief executive officer, said last week that the carrier planned to file objections to the U.S. Congress when it begins its review.

Not Acceptable

AT&T expects regulators will require it to divest wireless spectrum and subscribers to win approval for the acquisition, a person with knowledge of the situation said last week.

“This is a transaction that should not happen and is not one that can be conditioned in a way that makes it acceptable,” McKee said.

Mike Buckley, an AT&T spokesman, said the acquisition “will improve quality for consumers, provide a solution to impending spectrum exhaust” and bring so-called fourth-generation service to more Americans.

Reid Walker, a spokesman for T-Mobile in Bellevue, Washington, and Jeff Nelson, a Verizon Wireless spokesman, declined in e-mails to comment. Robert Kenny, a spokesman for the Federal Communications Commission, the phone-industry regulator, also declined to comment.

Sprint rose 10 cents, or 2.1 percent, to $4.78 at 4 p.m. in New York Stock Exchange composite trading. AT&T added 51 cents, or 1.8 percent, to $29.36.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net