Hesse Expects Industry Aid Against T-Mobile Deal, Despite Business Risks
SAN FRANCISCO -- Sprint CEO Dan Hesse said he expects industry help in his company’s fight to prevent AT&T from buying T-Mobile. Right after saying at a Commonwealth Club civic forum Friday that Sprint doesn’t expect to stand alone in its battle, he said the acquisition would hurt suppliers and distributors of network equipment and user devices, along with operating-system makers and applications developers. After the presentation, Hesse told reporters that such companies would face business risks in opposing the deal. He wouldn’t discuss what Sprint may be doing to organize opposition, with whom or with what success.
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The fate of the T-Mobile purchase rests mainly with the Justice Department, Hesse said during the program. “It’s hard to handicap” the outcome, he said. Sprint and T-Mobile are “much, much smaller companies” than AT&T and Verizon Wireless, and even combined would be third in the U.S. market, Hesse said. He declined to discuss reports that the smaller companies had discussed a merger before T-Mobile went with AT&T.
Sprint’s outlook if the acquisition goes through is “something I don’t want to contemplate,” Hesse said in Q-and-A. Carriers’ exclusives for devices are a “function of market power,” and AT&T and Verizon Wireless “could restrict our access to some of the cool devices,” he said. And one-third of Sprint’s cost of new cell sites is special access, money that goes largely to the big two because they control most landlines, Hesse said. He wouldn’t discuss whether Sprint would go after any spectrum or other assets that regulators might require to be sold as a condition of allowing AT&T to take over T-Mobile.
A service will emerge “shortly” that would turn off a cellphone whenever it’s going at least 10 miles an hour, sending all incoming communications directly to message storage, Hesse said. The feature is meant “to reduce distracted driving,” he said. Hesse said that as the father of boys aged 12 and 15, he has a personal interest in the problem. As chairman of CTIA, he has declared it an industry priority, he said.