USA

Sprint files to block AT&T/T-Mobile USA deal

Reuters News
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Posted: May 31, 2011 4:00 PM

NEW YORK (Reuters) - Sprint Nextel has formally asked U.S. regulators to block AT&T Inc's proposed $39 billion purchase of T-Mobile USA, saying the deal "has no public interest benefit" and would harm competition.

Sprint -- the most vocal opponent of the massive deal that would create a new leader in the U.S. wireless market -- said that even if the Federal Communications Commission forced AT&T to divest assets, it would not be enough.

"The proposed transaction would produce no tangible public interest benefits and would impose serious anti-competitive harms that cannot be remedied through divestitures or conditions," Sprint said on Tuesday, the deadline for initial responses to AT&T's application to the FCC.

Sprint, the No. 3 U.S. mobile operator, argued that the deal would raise prices for consumers, and disputed AT&T's argument that it needs T-Mobile USA's spectrum.

Rather than needing more spectrum Sprint said AT&T "simply failed to upgrade or invest sufficiently in its network" and argued that AT&T already has enough spectrum to cover 97 percent of Americans with high-speed wireless services.

Another Sprint argument is that smaller companies would have less power to moderate service pricing after the deal as the two top carriers, AT&T and Verizon Wireless, would then control about 80 percent of the market.

T-Mobile USA is a unit of Deutsche Telekom. Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.

(Reporting by Sinead Carew in New York and Diane Bartz in Washington; editing by Matthew Lewis)