Sprint Files Lawsuit, But Winning Wouldn't Address Fundamental Issues

Sprint Nextel has filed a new lawsuit against AT&T, AT&T Mobility, Deutsche Telekom and T-Mobile USA seeking to block the proposed acquisition as a violation of Section 7 of the Clayton Act. The Clayton Act allows contestants and the federal government to act in advance of potential antitrust activities in a preemptive way. Clayton Act is an antitrust statute

The lawsuit was filed in federal court in the District of Columbia as a related case to the Department of Justice’s (DOJ) suit against the proposed acquisition.

Sprint’s lawsuit focuses on the competitive and consumer harms which would result from a takeover of T-Mobile by AT&T

There remains substantial disagreement about what might be possible if the wake of a Justice Department and further Federal Communications Commission ruling that the proposed AT&T deal would be anti-competitive. Some believe the same logic might now bar Sprint from attempting to merge with T-Mobile USA, something Sprint clearly has thought about.

Sprint would clearly breathe easier if AT&T did not acquire T-Mobile USA. But that would not resolve any of Sprint’s other fundamental problems, including its lagging rate of subscriber additions, churn issues, liquidity or market share issues.

Needless to say, T-Mobile USA, which has struggled for a decade, still would have to face issues even greater than Sprint's challenges. Sprint already has its 4G network operating, and soon will add Long Term Evolution. T-Mobile USA does not own spectrum allowing it to do so.