U.S. based Sprint today filed a lawsuit to stop a rival telecom company, AT&T from merging with T-mobile, joining the U.S. Justice Department in throwing another hurdle in front of the deal.
Susan Haller, vice president of Sprint's legal team said that the company opposes AT&T's proposed takeover of T-Mobile. She stated, "With today's legal action, we are continuing that advocacy on behalf of mobile consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is very illegal."
The Overland Park, Kansas-based carrier's lawsuit focuses competition in the industry and whether consumer may be hurt as a result of the planned merger. Sprint believes AT&T's purchase of T-Mobile would "harm retail consumers and corporate consumers by causing higher product prices and less innovation."
Sprint, which believes a merger would leave AT&T and Verizon with more than 80 percent share of the wireless market, effectively creating a duopoly, has been one of biggest opponents of the AT&T/T-Mobile merger since its beginning. But the company had not taken legal action against the merger until now.
Sprint's lawsuit comes just a few days after the Department of Justice (DoJ) filed its own suit to stop the deal, citing concerns it would violate the U.S. antitrust law and "substantially lessen competition" in the wireless industry.
Even if the DoJ fails to block the merger, AT&T will likely have to settle with the government by agreeing to keep its wireless plan prices low and possibly sell up to 25 percent of T-Mobile's business and assets.
Sprint may support the DoJ's case by presenting its own research to prove the planned merger would harm consumers and competition. And even if the wireless company cannot block the merger, it may also see the benefits of a legal settlement.
Sprint appears to be fighting for the consumer with this suit, but the company is also fighting for its own survival. CEO Dan Hesse stated that a successful AT&T/T-Mobile merger would push Sprint out of the market, leaving his company unable to offer lower-price handsets and mobile plans to compete.
If the merger goes through as AT&T and T-Mobile initially planned, Sprint will be considerably dwarfed and may not be able to compete in the wireless market. By suing to stop the acquisition, Sprint may at the very least lessen the potency an AT&T/T-Mobile merger would have on its own business.