AT&T Inc. fires back at Sprint Nextel Corp.'s Hesse

AT&T Inc.’s (T) Jim Cicconi continued a war of words with Sprint Nextel Corp. (S) CEO Dan Hesse, which escalated after Hesse said at a speech in San Francisco that the proposed $39 billion acquisition of T-Mobile USA Inc. (DTEGY) by AT&T creates a “serious threat” to innovation in the wireless world and that the move could “push the wireless industry from competition to duopoly.”
“We have great respect for Dan Hesse as an executive, but his comments today about AT&T’s merger with T-Mobile are way off base,” said Cicconi, senior executive VP of external and legislative affairs. “They’re also totally at odds with his own past statements.”
According to Cicconi’s public blog post, Hesse previously claimed that mergers and acquisitions are “absolutely a way to get the growth in the industry, if a particular transaction makes sense for anybody,” and that Hesse’s statements lately are in direct opposition to his previous demeanor.
“Given that Sprint is a major competitor to AT&T in the hyper competitive wireless market Mr. Hesse describes, no one should be surprised that they would oppose this merger,” Cicconi wrote in his post. “But it is self-serving for them to argue that the highly competitive wireless market they cited only months ago is now threatened by the very type of transaction they seemed prepared to defend previously.”
Cicconi’s statements come in the wake of Sprint issuing releases opposing the merger, with Hesse cited as having criticized the deal on several occasions since its inception. Cicconi has a valid point to make, considering that Sprint had shown interest in pursuing T-Mobile USA for itself in the past.
“If Sprint is worried about the growth or position of its competitors in the wireless space, the proper place for them to respond is in the marketplace,” Cicconi concluded.
If AT&T successfully buys out T-Mobile USA, the company could become the largest carrier by leaps and bounds, with an estimated 130 million subscribers. The Federal Communications Commission and the U.S. Department of Justice will have to decide on approving the merger, which is expected to take at least several months, including lengthy congressional hearings from lawmakers. It’s likely that compromises will be made, with splits in subscribers and spectrum transfers being made amongst providers.