The blow and counter blow of AT&T and Sprint discussing in public the deal whereby AT&T buys T-Mobile, makes entertaining copy, but it doesn’t count for much. Or at least it shouldn’t.
This time it is an open spat between Sprint CEO Dan Hesse saying quite rightly, ‘We just can’t let this happen,’ and some idiot at AT&T described as a company policy executive, named Jim Cicconi saying the comments are ‘way off base,’ implying the Hesse is a hypocrite.
We won’t go on and on about it this week we promise, because we’ve done that before, but comments like, ‘If Sprint is worried about the growth or position of its competitors in the wireless space, the proper place for them to respond is in the marketplace,’ which is of course exactly what AT&T is refusing to do. Why can’t AT&T grow in the marketplace, instead of whipping up public opinion by buying out the only rival that uses the same technology that it does? If it is successful Verizon will be forced to bid for Sprint to level off the playing field, and we end up with all the CDMA2000 networks on one side and all the W-CDMA networks on the other.
The entire reason for anti-trust legislation is factual ‘ companies that are too big find that not only do they fail to innovate, but they treat competitors with disdain, so much so, that the people running them honestly believe that it’s okay to cheat, just a little bit. And the trouble with a company that is using its weight to put other people off doing business with you, is that their executives really think they are ‘competing in the marketplace.’
Is it even competing in the marketplace to bundle fixed line services with cellular services? It makes sense, but is it playing fair when you are a monopoly in multiple networks? And you are up against a cellular business that doesn’t have a TV or a residential broadband service or a cluster of WiFi hotspots to throw into the equation? Would the Apple exclusive on the iPhone (now dead) have been tolerated if it was delivered by any kind of monopoly? After all an exclusive by a monopoly is a case of using its weight to prevent another company from having an advantage that it is allowed to have. That’s not fighting fair in the marketplace. Oh yeah, but AT&T isn’t a monopoly, not yet?
We hope that the US legislators are either shouted down by politicians, or are swayed by these ‘compete in the marketplace’ arguments, and the deal goes ahead. We’ll be entitled to deliver a huge dose of ‘I told you so’ when AT&T begins to illegally bully others, and companies like Sprint sue the pants off it for anti-trust, AND the Justice department gets on its case and prevents it ever having another phone exclusive, or makes it unbundle access to its WiFi hotspots, or says that pricing which includes four services ‘ classic Quad play ‘ in a bundle, are illegal because it’s a monopoly. All of which are good reasons for not letting the deal go ahead in the first place.
AT&T management should read the history books before going after this merger, and should beware of what they wish for. Acquiring the T-Mobile customers by hard fought innovation and competition would leave the company in a far better position and in four or five years, it might acquire that many new customers. But AT&T is in a hurry. This group of executives want to reach a position where they can bully everyone as fast as possible, because it will make their job easier. Unfortunately it will mean the next set of executives who replace them (after they are fired for putting AT&T in a mess) will be faced with another ‘Humpty Dumpty’ situation, where the company will be broken up once again, and this time, no-one will bother to put it back together again.