After the $39 billion deal between AT&T and T-Mobile has been in stuck in the bureaucratic deadlock, there was intense drama in the antitrust court where AT&T sees firm opposition from Sprint, because if the deal is completed, Sprint will be the firm with the smallest market share in the United States. With Verizon having 100 odd million customers, and AT&T currently having 95.5 million, the merger will beyond doubt make AT&T the largest company in the market.
The deal further seems logical as both companies use similar technologies for communications, hence it being logistically smooth. The merger will lead to better quality of calls and 30 per cent of the total area will see improved facilities, especially in the video call section. The merger also makes sense because both these companies are looking at buying stakes in the emerging 4G spectrum.
The lawyers who represent AT&T urged the court to dismiss the claims made by Sprint so that the actual court hearings over the antitrust matters of the deal are solved. AT&T’s principle argument remains that antitrust laws are for the consumer’s protection and not for competitors like Sprint.
Sprint’s other argument that the deal would push up roaming charges also is one that has little truth. As Sprint uses different technology for its communications, it doesn’t buy roaming spectrum from either AT&T or T-Mobile, thus there being no chance of it leading to a rise in roaming costs. Sprint further argued that the deal would lead to AT&T raising prices for the wires and cables it leases from AT&T and other such rival firms to connect their towers to each other. AT&T countered the viewpoint by saying that since Sprint is not a big firm in the backhaul business and also because even after the takeover, the new company- AT&T-T Mobile – will not be a major player responsible for pricing.
The core reason behind these events is definitely because Sprint is very scared that with the takeover, there will be a duopoly of AT&T and Verizon. When that happens, Sprint- also a national level carrier – is extremely apprehensive that their market share will subsequently dwindle as also the customer base. Sprint also believes that this will be a way for AT&T (new and united) to manipulate the contracts according to their benefit and will lead o Sprint being driven of the handse tmarket.
