Sprint on Tuesday hit back at AT&T over a blog post that accused Sprint CEO Dan Hesse of flip-flopping when it comes mergers in the wireless industry, and reiterated that a combined AT&T and T-Mobile would significantly harm the wireless space.
"Let me be very clear, at Sprint we are not opposed to M&A or consolidation in the industry, but we are opposed to an acquisition that creates a duopoly and blatantly consolidates market power in the hands of these two companies," Sprint spokesman John Taylor said in a conference call.
During a Friday appearance in San Francisco, Hesse discussed his opposition to the AT&T and T-Mobile merger, arguing that the deal poses a "serious threat" to the wireless industry.
"We just cannot let this happen," Hesse said. "If the proposed AT&T and T-Mobile merger is allowed to go forward it can also push the wireless industry from competition to duopoly."
In a response on its blog, AT&T called Hesse's comments "way off base." AT&T's Jim Cicconi pointed to comments from Hesse in which he called the wireless industry "hyper competitive" and seemed to support a certain amount of consolidation in the market.
"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," Cicconi wrote. "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."
Sprint's Taylor argued that Cicconi distorted Hesse's words, and said that Sprint does believe that the wireless industry is competitive. But it won't remain that way if the AT&T and T-Mobile deal goes through.
"Dan's point [is that] if AT&T is allowed to swallow T-Mobile and allowed to create, along with Verizon, a duopoly that controls 80 percent of wireless revenue, the competitive nature of today's wireless market could be stifled and wireless innovation could be put at risk," he said. "We believe very strongly that this should not be allowed to happen."
In his blog post, AT&T's Cicconi quoted Hesse as saying that "M&A is absolutely a way to get the growth in the industry, if a particular transaction makes sense for anybody."
Taylor did not dispute that Hesse said this, but said it was in response to a question about acquisitions in the pre-paid space.
"Dan replied ... that we did view some consolidation as healthy in the industry. What he was not talking about at that time was combining the number two and the number four national players in the industry to create a clear duopoly," Taylor said.
In response, an AT&T spokesperson said Tuesday that "Mr. Hesse's recognition in recent comments that the U.S. wireless marketplace is fiercely competitive speaks for itself. As we stated last week, this hyper competitive marketplace will not become less so because of our transaction with T-Mobile."
Taylor insisted that Sprint "will not stop sounding the alarm" and urged journalists and regulators not to be "distracted" by what Sprint considers to be misleading statements from AT&T.
He went on to insist that a combined AT&T and T-Mobile will not, as AT&T said, expand 4G LTE or AT&T's footprint since AT&T and T-Mobile's networks "almost entirely overlap."
Sprint did not provide time for reporters to ask questions but insisted it will do so later in the week.
AT&T did not immediately respond to a request for comment on today's call.
AT&T surprised the tech community last month when it announced plans to acquire T-Mobile for $39 billion. AT&T argued that the purchase will help stop the spectrum crunch and spur the companies's deployment of 4G service.
Last week, the Federal Communications Commission formally kicked off its investigation of the deal by opening a public notice. On May 11, the Senate Judiciary Committee will also hold a hearing on the matter.
Politico reports that Sprint has signed contracts with veteran lobbyists at three Washington firms in an effort to battle the merger on Capitol Hill.