Sprint slates AT&T acquisition plans as T-Mo goes on down-low

Sprint has demanded US regulators look closely at the proposed AT&T takeover of T-Mobile USA, warning that the deal would “alter dramatically the structure of the communications industry” and lead to a negative impact on “innovation and robust competition.” If approved, Sprint says, the combined carrier would be three times its own size, and have hitherto unseen control over backhaul and other access systems. Meanwhile, T-Mobile has pulled out from an upcoming CTIA 2011 panel, pushing out a FAQ in which it attempts to placate customers confused by the acquisition news.

More details after the cut

“The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the communications industry. AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor.

If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US wireless post-paid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete. The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely and by this dramatic change in the structure of the industry.” Sprint statement

“T-Mobile will not be joining [the CTIA panel] due to extenuating work demands” a show representative confirmed, though Verizon, AT&T and Sprint execs will still be joining the panel. CNBC’s Jim Cramer will moderate the event, which is likely to be dominated by talk of the potential acquisition.

Regulatory approval is more than just a formality, and could have significant financial implications to AT&T if the deal is blocked. The carrier would have to pay in the region of $3bn in breakup fees as well as commit to other penalties such as loss of spectrum.