Sprint Nextel, the No.3 U.S. wireless carrier, filed a civil suit Tuesday to block the $39 billion takeover of T-Mobile USA by AT&T alleging it would harm consumers by stifling completion and innovation.
The filing came six days after the U.S. Justice Department sued AT&T, the No. 2 carrier, and T-Mobile, No. 4, seeking to block the merger on antitrust grounds. Dallas-based AT&T and Bellevue, Wash.-based T-Mobile are fighting the suit. T-Mobile is owned by Deutsche Telekom.
Sprint's civil suit was filed in U.S. District Court in Washington, where the Justice Department's suit has already been assigned to Judge Ellen Huvelle. It's not immediately clear if she will also be assigned this suit, although that's the likely practice.
Overland Park, Kansas-based Sprint names AT&T, AT&T Mobility, Deutsche Telekom and T-Mobile as defendants, asserting that if the deal concludes, it would entrench the duopoly control of AT&T and Verizon Communications of New York, the No. 1 wireless carrier.
The enlarged AT&T would harm Sprint as well as other independent carriers such as U.S. Cellular and CenturyLink, the filing said. AT&T and Verizon could control 90 percent of the market if the deal is not blocked.
We expect to contribute our expertise and resources in proving that the proposed transaction is illegal, said Sprint General Counsel Susan Haller.
Like the Justice Department, Sprint claims the enlarged AT&T's power would violate the Clayton Act, which deals with antitrust issues.
Sprint itself has grown to its present size through several acquisitions, most notably the $35 billion takeover of Nextel Communications concluded in 2005.
Sprint shares fell 2.8 percent Tuesday to $3.43 in midafternoon.