RCA 2011: Sprint Nextel adds might to RCA

LAS VEGAS – The Rural Cellular Associations snared a significant catch getting Sprint Nextel Corp. (S) to join the association, which traditionally has catered to smaller wireless players. The move follows similar additions from MetroPCS Communications Inc. and Cincinnati Bell Wireless.
RCA’s members now include many of the industry’s largest wireless operators save for the two largest – Verizon Wireless and AT&T Mobility, and No. 4 T-Mobile USA Inc., which is in the process of being acquired by AT&T Mobility.
That issue appears to have been the final straw in Sprint Nextel deciding to join RCA, as both entities are strongly opposed to the potential deal that would see the nation’s two largest GSM-based operators join forces to form a new No. 1 operator with significant market clout.
Sprint Nextel’s opposition has at times evolved into a war of words between the carrier and AT&T Mobility.
In its joining of RCA, Sprint Nextel noted that as the industry has evolved it has found itself more in alignment with RCA, thus joining the trade association made sense.
Beyond the big issue of the proposed AT&T/T-Mobile USA deal, both Sprint Nextel and RCA share similar views on data roaming and equal access to backhaul services, many of which are currently controlled by AT&T Inc. and Verizon Communications Inc.
Sprint Nextel has numerous roaming agreements with RCA members for both CDMA and iDEN voice and data services. Both have also been working together on the 700 MHz D-Block issue for public safety.
RCA noted that having Sprint Nextel on its side against the proposed deal should help in providing additional support in the all-important lobbying efforts that the AT&T/T-Mobile USA deal will attract.
Analysts have noted that Sprint Nextel will have to be careful with its opposition to the deal as it has several deals rumored to be in the works that could bring it a closer relationship with Clearwire Corp. and LightSquared.
“While securing merger clearance from the DoJ (Department of Justice) and the FCC represents a very heavy lift on its face, we believe any and all moves by Sprint to strengthen its position as the No. 3 national wireless carrier could improve the comfort level of policymakers in considering the proposed union between the No. 2 and No. 4 wireless operators,” noted Medley Global Advisors L.L.C. analyst Jeffrey Silva in a recent report. “Therein lies a potential paradox for Sprint as government antitrust lawyers and federal telecom regulators begin to delve into their comprehensive reviews of the horizontal transaction.”