AT&T Becoming 'More Aggressive' Toward T-Mobile May Hurt Sprint's Plans

Analysts at Stifel say AT&T's attempts to lure customers away from T-Mo make a Sprint tie-up even more difficult.

Channel Partners

January 3, 2014

2 Min Read
AT&T Becoming 'More Aggressive' Toward T-Mobile May Hurt Sprint's Plans

AT&T’s announcement on Friday that it will try to lure customers away from T-Mobile USA, the operator it tried in 2011 to purchase, “is a prime example of why regulators will be concerned about a potential acquisition of T-Mobile USA by Sprint,” said analysts for financial advisory firm Stifel.

“[W]e believe the position of T-Mobile as a ‘maverick’ and very aggressive carrier, as well as its recent success in market share gains, makes the approval of such a deal more challenging,” the analysts added. “Seeing one of the two major Bell carriers directly become more aggressive to combat T-Mobile’s aggressiveness will reinforce this view even more among regulators and anti-trust officials in Washington, we believe.”

The observations come as AT&T said it’s going to start offering T-Mobile users up to $450 to switch carriers. Customers who do take AT&T up on its proposal will have to trade in their current phones for a credit of up to $250 toward AT&T products and services. They’ll also be eligible for a $200 credit per line when transferring their T-Mobile phone number to one of AT&T’s Mobility Next rate plans.

Meantime, recall the Sprint-T-Mobile reports that surfaced in December. The Wall Street Journal said that Sprint may, in the first half of this year, seek to buy T-Mobile for around $20 billion.

Sprint was said to be investigating regulatory concerns so it can decide whether to pursue a deal. In late 2011, AT&T, the second-largest wireless operator in the United States, dropped its $39 billion bid for T-Mobile due to governmental opposition. The WSJ said Sprint would face similar pushback, as a pairing with T-Mobile would take U.S. wireless options down to three from four. Now, as Stifel’s analysts noted, AT&T’s willingness to increase its aggression against one of the few remaining competitors in the United States also may put a damper on a Sprint-T-Mo combination.

Indeed, AT&T’s announcement “underlines many of our concerns and skepticism regarding the eventual regulatory and anti-trust approval by the DOJ and FCC of a potential Sprint-T-Mobile tie-up,” the analysts wrote.


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