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Verizon: no interest in buying Sprint to counter AT&T

updated 12:25 am EDT, Tue March 22, 2011

Verizon says no takeover of Sprint imminent

Verizon's wireless chief Dan Mead in a talk downplayed speculation that his network might buy Sprint as a response to the AT&T buyout of T-Mobile. He argued that Verizon wanted to be profitable first rather than try for more market share. He added to Reuters that Verizon wouldn't stand in the way of the merger, in part because Verizon officials "don't need them" at Sprint but also because he thought the Department of Justice and FCC might force AT&T to give up too many cell sites or privileges to make it worthwhile.

"Anything can go through if you make enough concessions," Mead explained.

Critics had feared that Verizon would institute a knee-jerk buyout of Sprint to overcome the roughly 30 million subscriber deficit. Sprint has already raised concerns that putting 80 percent of subscription phone users in the US on one network would be too anti-competitive. A Sprint and Verizon deal would likely lead to a more entrenched duopoly and make it difficult for US Cellular, Cricket or any other smaller carrier to get a foothold.

AT&T has contended that its buyout would meet national goals and that 18 of the 20 largest urban areas had four or more carriers, but many of these are hamstrung by device selection or by the lack of wireless spectrum they can use, either of which might be exacerbated if the AT&T and T-Mobile merger completes within a year.

For Sprint, the lack of a Verizon merger could still be more damaging. It may now have a chance to survive as an independent entity, but it has only just begun adding regular subscription customers and is still losing hundreds of millions of dollars every quarter. The T-Mobile deal and the lack of a Verizon deal will cut off a possibly major source of funding.




by MacNN Staff

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Comments

  1. facebook_Trademark

    Via Facebook

    Joined: Mar 2011

    0

    Similar Story

    With yesterday's major telecom merger announcement between AT&T (T) and Deutsche Telekom AG T-Mobile unit (DTEGY.PK), the pressure will be on for Verizon (VZ) to do something to keep up. Yesterday's merger leaves the US with only three large carriers, and Sprint Nextel (S) is now a distant third in market share. Verizon may want to consider how yesterday's merger leaves each Sprint Nextel subscriber valued about 77% lower than each T-Mobile subscriber.

  1. shigmas

    Joined: Dec 1969

    +1

    what kind of logic is that?

    What is his strategy? Profitability over market share? AT&T's goal of attaining short term market share over actually providing a good product is the new American way.

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