Posted by: Jim Cicconi on April 15, 2011 at 5:44 pm
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. They’re also totally at odds with his own past statements.
As recently as last October, Mr. Hesse said the wireless industry is ‘hyper competitive‘. The month prior, his CFO talked about how ‘tough‘ retail competition is in the wireless market, citing at least six major competitors. In February of last year, Mr. Hesse said, “M&A is absolutely a way to get the growth in the industry, if a particular transaction makes sense for anybody.” He went on to say, “I think consolidation will be healthy for the industry, some consolidation. It is, needless to say, very competitive.” And in January of last year at a Citi Global Conference, Mr. Hesse said, “Well, there is no question that we have an extremely competitive wireless industry in this country and that the pricing is getting much more aggressive.”
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. 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.
The fact is that Sprint is the 58th largest corporation in America, with 50 million customers, $40 billion in annual revenue, and the self-proclaimed #1 spectrum position in the industry. Under current management, Sprint is once again growing customers. We respect them as (to use their own words) a tough retail competitor in a hyper competitive wireless market with five or more players in most major markets. And we believe the facts will demonstrate that this hyper competitive market will not become less so simply because of one transaction.
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. Where customers have ample choices, as they clearly do in wireless, any competitor can improve its prospects by offering a better idea, a better product, better service, or a better price. In short, as in any competitive market, Sprint’s prospects for growth are in their own hands, and rest with their own business decisions.
AT&T’s merger with T-Mobile is very much in the public interest and will bring the extraordinary benefits of mobile broadband to millions of people. Rural communities that don’t have a viable broadband option today will finally have the same type of high speed service big cities enjoy. And our customers in urban areas can expect improved service that will keep up with the tremendous capacity demands being placed on our network. These are the very type of steps needed to meet the goals set forth by the President and the National Broadband Plan, and are vital if we are to maintain our country’s ability to compete globally.