Sprint warns AT&T’s T-Mobile acquisition could hurt profits

Sprint seems wary of the claims that AT&T could eventually acquire competing carrier T-Mobile despite the acquisition procedure yet to be completed. Sprint hasn’t gone ahead and officially opposed the merger but it is worried that a combined user base of 130 million users could be a tough challenge for the CDMA based carrier. Such strength could give them the ability to get better pricing from suppliers. This could directly influence a dip in profits which will eventually force Sprint to increase the prices for both products and services. What will add to this pressure is the fact that phone subsidies from carriers will continue to increase as the devices become more powerful and this again will hurt Sprint pricing.

Sprint Chief Executive Dan Hesse has been pretty vocal about his criticism and he has even gone ahead and mentioned mentioned that “. If this transaction goes through you’re talking 79 percent, or roughly 80 percent of the market controlled by two companies. I think that’s a little too much–too much concentration.”

There are calls already to move FCC into scrutinizing this acquisition stating reasons that lack of competition could potentially lead to higher prices and reduced service.

Via: Appleinsider