It's not often a company will cheer when the government directly intervenes in its industry, but things are different when you face potential oblivion without government action.
In this light, it's easy to see why Sprint is cheering a Department of Justice decision today to file a civil antitrust suit aimed at blocking the proposed $39 billion merger between AT&T and T-Mobile.
"The DOJ today delivered a decisive victory for consumers, competition and our country," said Vonya McCann, Sprint's senior vice president of government affairs. "By filing suit to block AT&T's proposed takeover of T-Mobile, the DOJ has put consumers' interests first... Contrary to AT&T's assertions, today's action will preserve American jobs, strengthen the American economy, and encourage innovation."
Sprint CEO Dan Hesse has been one of the most vocal critics of the AT&T-T-Mobile merger since it was proposed earlier this year and has persistently argued that such a large wireless company would have "tremendous" power over the wireless market and would be bad for consumers.
"If you take a look at the market power of the big two, in postpaid, which is contracts, the way most users think of the business, in 2005 the big two had 52% market share," Hesse told CNBC's Jim Cramer this past March. "They've expanded that now with acquisitions in the last few years, up to 67%. If this transaction goes through you're talking 79%, or roughly 80% of the market controlled by two companies. I think that's a little too much -- too much concentration."
A study by the Yankee Group released this month claimed that Sprint was likely to become a top acquisition target if the AT&T-T-Mobile merger passed and stated that it was "only a matter of time before Verizon purchases Sprint and adds Sprint's 51 million subscribers to its 95 million, thereby creating a national duopoly."
The DoJ put the future of the merger in doubt, however, when it filed a lawsuit with the U.S. District Court with the District of Columbia today arguing that the proposed merger would significantly damage competition in the wireless industry, especially since T-Mobile has historically offered low-cost wireless voice and data services for customers. The DoJ also contended that any efficiencies gained by combining AT&T and T-Mobile spectrum would not be enough to offset the damage done to U.S. consumers by further consolidation of the wireless industry.
Read more about anti-malware in Network World's Anti-malware section.