AT&T Exec Downplays Competition Concerns
AT&T's plans to buy Deutsche Telekom's T-Mobile USAfor $39 billion would create the largest U.S. wireless carrier. The proposal has yet to win approval from regulators, but there is already growing concern about how the deal might affect competition.
AT&T and Verizon Communications currently hold nearly 80 percent market share, Sprint Nextel CEO Dan Hesse told Cramer on Tuesday's "Mad Money." So Hesse thinks AT&T's proposed merger would give just two companies even greater power over the wireless space. In turn, he said Sprint and other smaller players wouldn't be able to compete.
Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, said the smaller service providers are good competitors. He doesn't think that will change should the deal go through. Names like MetroPCS Communications , for example, continue to grow and are rolling out smartphone devices. Sprint in particular appears to be a good competitor going forward, de la Vega said.
"If you look at the amount of spectrum that AT&T and T-Mobile have combined, Sprint has more. In fact, if you look at the spectrum that they have per subscriber, they have three times the amount of spectrum per subscriber than we do," De la Vega said. "So they're still going to be a great company. They're still going to be great competition and the U.S. is still going to be a really competitive market."
While de la Vega wouldn't comment on how the U.S. Department of Justice might rule on his company's proposal, he pointed out that it has previously looked at competition on a local level. Eighteen of the top-20 markets currently have more than five or more wireless providers. So even with a AT&T, T-Mobile deal, he said the U.S. would remain the world's most competitive market.
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