Sprint Nextel and C Spire have agreed to postpone their lawsuits against AT&T’s troubled merger with T-Mobile. A federal judge approved motions filed jointly by the companies and AT&T on Tuesday. Sprint originally sued to block the merger in September.
The deal has drawn attention from the Department of Justice and the Federal Communications Commission due to concerns that it would reduce competition and raise prices for consumers.
Dish Network has set its sights on entering the wireless game with T-Mobile if the acquisition fails, according to a Bloomberg report.
On Monday, the judge agreed to stay any court proceedings in the DoJ’s antitrust case to Jan. 18, allowing the wireless companies more time to revise the details of the proposed merger.
AT&T is in the process of deciding whether and how to revise the current transaction in order to achieve regulatory approval. The carrier has set aside US$4 billion in reserves, which could be part of a $6 billion break-up payment to T-Mobile.
Sprint Asks for a Temporary Stay
With AT&T taking a different direction on the merger, Sprint and C Spire are in a holding pattern.
“Sprint didn’t comment on the judge’s order to grant a stay in the DoJ case, but on Tuesday, Sprint did comment on the motion from AT&T, DT, T-Mobile, C Spire and Sprint asking the judge to grant a stay in the Sprint and C Spire cases,” John Taylor, a spokesperson for Sprint, told the E-Commerce Times. “The stay was granted shortly after we issued a statement postponing action.”
Sprint asked the court to grant a motion to stay further court proceedings related to Sprint and C Spire’s pending antitrust litigation against AT&T, Deutsche Telekom and T-Mobile until Jan. 18, 2012, Taylor noted, adding that the proposed stay is the same as the one ordered Monday in the case filed by the Justice Department and state attorneys general.
Sprint also asked that if AT&T, Deutsche Telekom and T-Mobile should decide to reinitiate court proceedings in January, then parties to all of the cases would agree to a Jan. 18 conference with the court to determine next steps.
AT&T and C Spire did not respond to our requests to comment for this story.
Where’s the Uproar?
With all of the combatants putting down their weapons, it begins to look like the merger is off the table.
“It looks like the deal is dead,” Laura DiDio, principal analyst at ITIC, told the E-Commerce Times. “From what AT&T said, they were looking at finding a way to restructure the deal to make it palatable to the government, but I don’t think that is possible.”
AT&T originally said it was going to guarantee jobs, noted DiDio.
“This is unlike other deals where the jobs went bye, bye,” she said. “So I’m mystified as to why this one is getting rejected. Now it looks like we’re back to square one.”
There have been a number of other peculiarities surrounding the proposed merger, DiDio pointed out. “The thing that has amazed me is that T-Mobile never took the ads off the air that dissed AT&T.”
It’s also surprising that AT&T is not putting up a bigger fight in public, she said.
“None of the principals are talking. AT&T’s response has been muted and tepid,” DiDio observed. “Their reaction has been half-hearted. The fact that AT&T wasn’t louder tells me they know the deal is dead. So what’s the issue? Why is this one getting rejected?”