Public opposition to Sprint-T-Mobile merger still strong

According to The Wall Street Journal, Sprint Corporation and its swaggering chairman Masayoshi Son are being forced to face an unpleasant fact. Hardly anyone seems to like the idea of Sprint buying T-Mobile and reducing the number of national wireless competitors to just three.

Ryan Knutson of the Journal said that Son and CEO Dan Hesse knew it would be a tough sell, but a source told him that “... the men were surprised by the level of opposition and its very public nature.”

Some of that opposition came from the highest levels. As Speed Matters reported two weeks ago, William J. Baer, assistant attorney general (U.S. DOJ) for the antitrust division, said that it would be hard for anyone to persuade regulators that cutting the number of major wireless carriers would improve service and competition.

And, as Speed Matters posted last week, a Reuters source said that Tom Wheeler, in conversations with Son and Hesse, was more inclined to support Baer’s position or wariness on mergers.

Moreover, as Bloomberg reports, Sprint’s recent quarterly earnings report – which beat analysts’ expectations – makes it more difficult for Sprint CEO Son's case that Sprint needs to merge with T-Mobile to compete with AT&T and Verizon. As analyst Kevin Roe of Roe Equity Research told Bloomberg:

“Sprint will get it right and ultimately be in a position to challenge AT&T, Verizon and T-Mobile,” Roe said in an earlier e-mail. “SoftBank does not need T-Mobile to achieve a Sprint turnaround.”

Labor and consumer groups have also registered their disapproval.

CWA said in January, “The financial sector will benefit from this deal, but it would result in job loss for American workers and likely higher prices and fewer choices for consumers. Regulators need to make clear that this deal is a non-starter.”

And Public Knowledge’s John Bergmayer said last December, “Basically, the national wireless market is already too concentrated. We need more, not less competition.” Public Knowledge remains opposed to the Sprint merger.

Sprint Rethinks Acquiring T-Mobile After Public Antitrust Opposition (WS Journal, Feb. 10, 2014)

Antitrust chief says a Sprint-T-Mobile merger would be “hard” (Speed Matters, Jan. 30, 2014)

Wheeler indicates to Sprint that he’s skeptical of merger (Speed Matters, Feb. 4, 2014)

Tycoon’s Threat to Set Himself Ablaze Shows T-Mobile Grit (Bloomberg Tech, Feb. 12, 2014)

U.S. Regulators Should Make Clear that SoftBank-T-Mobile US Deal is Non-Starter (CWA, Jan. 20, 2014)

A Few Thoughts on the Sprint/T-Mobile Merger Rumors (Public Knowledge, Dec. 13, 2013)