Sprint Attempts to Block AT&T, T-Mobile Merger with Lawsuit
Sprint has apparently pulled out all the stops to prevent cell phone carrier giants AT&T and T-Mobile from merging by filing a lawsuit Tuesday.
The cell phone carrier's current lawsuit, filed in U.S. District court, is its second one aimed at stopping a merger that would make AT&T the largest telecom firm in the U.S.
"With today's legal action, we are continuing that advocacy on behalf of consumers and competition," Susan Z. Haller, Sprint's vice president of litigation, said in a statement. “Sprint expects to contribute our expertise and resources in proving that the proposed transaction is illegal.”
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The Department of Justice also filed a similar lawsuit just a few days ago that would throw a wrench in the $39-billion takeover of T-Mobile by AT&T.
Sprint’s latest lawsuit is based on a concern and complaint that both companies, operating as a single entity, would make it difficult for other carriers to compete on the market.
The firm feels the market would revert to a 1980s-style duopoly, which would lead to higher phone charges for subscribers.
AT&T intends to go head-to-head with the Department of Justice, but at the same time is continuing talks with Washington in an effort to come to a settlement on the dispute.
Deutsche Telekom, the parent company of T-Mobile, stated that it has no issue with the sale and that it will continue to initiate measures to ensure the transaction is successful.
AT&T has also announced its intention to fight back against Sprint.
"This simply demonstrates what we've said all along-Sprint is more interested in protecting itself than it is in promoting competition that benefits consumers," AT&T said in a statement. "We of course will vigorously contest this matter in court."
Sprint's fate may very well depend on whether this merger goes through or not. Its stock already dropped 20 percent since the beginning of this year and the company was having a hard time competing with AT&T and Verizon.
If AT&T fails at acquiring T-Mobile, Sprint can also make a bid for the company. If Sprint manages to accomplish what AT&T has been attempting to do, the cell phone carrier would become the third largest competitor, after AT&T and Verizon.
