Sprint lawsuit against AT&T/T-Mobile merger is approved

Posted by Mark Raby

Sprint will be allowed to sue AT&T over its plan to acquire fellow carrier T-Mobile, a plan that is continuing to face problems from the mobile industry and government regulatory agencies.

At issue is whether or not AT&T and T-Mobile, when combined, would form a monopolistic company and stifle competition in the cell phone space.

While Sprint and Verizon would obviously still offer a fair amount of competition, the resulting company from the proposed merger would be substantially bigger than any other carrier.

In addition, AT&T and T-Mobile are the only two major carriers in the US that operate on the global GSM standard, meaning there would be a monopoly in that sector of the market.

Because of the potential impact on the entire industry, Sprint sued AT&T, mainly as a way to gain access to documents and information on the merger that would otherwise remain undisclosed.

Not surprisingly, AT&T worked fervently to prevent Sprint's lawsuit from ever gaining any traction, but a US judge ruled this week that the case will move forward. It is a huge blow to AT&T.

The acquisition bid is also the subject of a lawsuit from the US Department of Justice. The fact that the government is suing AT&T over the buyout is not a good indicator of things to come, since it is the government that needs to stamp a seal of approval on the deal.