April 15, 2011, 10:49 PM — A month later and Sprint chief executive Dan Hesse still hasn't warmed up to No. 2 U.S. wireless carrier AT&T's $39 billion purchase of No. 4 T-Mobile USA.
For good reason. Should the merger be approved by antitrust regulators, it would leave Sprint in a distant third place in the U.S. wireless market -- a dangerous place to be.
With 95.5 million U.S. subscribers already, AT&T has a narrow lead over Verizon Wireless, which has 94.1 million subscribers. But add in T-Mobile's 33.7 million subscribers, and AT&T's total zooms to 129.2 million wireless subscribers, or 47 percent of the current U.S. market, with Verizon in second with 34 percent. Sprint's share would be only 18 percent -- the same as now, but it's a little different when there's someone else under you.
Speaking at an event in San Francisco, Hesse expressed concern that Sprint would be unable to compete against two large competitors. The ultimate losers, though, would be consumers, he said.
From the New York Times:
“Innovation and customer choice would be seriously affected if the wireless industry is allowed to become a duopoly,” Hesse said.
AT&T announced the T-Mobile deal on March 20. It is under review by the U.S. Justice Department and the Federal Communications Commission.